Home office and storage area expenses (ie where part of a residential property is used solely for business purposes) are deductible for tax purposes provided the home office and storage area is used for business purposes.
Typical home office expenses include power, gas, rates, insurance and mortgage interest. Home office expenses have to be apportioned between business and private use based on the following formula, area used as office/total size of house.
Home repairs and maintenance such as dining room or roofing repairs can also be claimed based on the business use proportion (Note: if the renovation is an improvement rather than a repair it must be depreciated, although from 1 April 2011 depreciation will no longer be able to be claimed). If a repair is made to a part of the house that has no business use (for example painting a child’s bedroom) then no home office deduction can be claimed.
For further information regarding the above, or for any other tax matters please contact us.