Working from home can create legitimate business costs, but a home office claim needs a sensible business-use basis and supporting records. The rules depend on how you earn income and whether you operate as a sole trader, contractor or company.
What home-office costs may be claimable?
Common categories can include a business-use share of household costs, internet, power, rates, rent or mortgage interest, insurance, repairs and depreciation. The exact treatment depends on the space, ownership, business use and whether the cost is private, business or mixed.
The key question is not “Can I claim my whole home?” It is “What part of this cost relates to earning business income, and how can I show that?”
Work out a reasonable business-use percentage
For a dedicated room, a floor-area method is often a starting point: business-use area divided by the total home area. A room used for both work and family life may need a time or availability adjustment. If the space is shared or changes during the year, document the assumption and use a reasonable method rather than choosing the largest possible claim.
Keep:
- a floor plan or measurements
- the dates the space was used for business
- household invoices and payment evidence
- the calculation used for the business percentage
- notes about private or shared use
If you work from a company’s home, the company and the homeowner may also need to document how costs are reimbursed or charged. Do not treat a company bank transfer as proof that the whole household cost is deductible.
Equipment is a separate question
Desk equipment, monitors, phones and computers may be business assets or partly private assets. Record the purchase date, cost, business-use percentage and how the item is used. Some assets may be claimed through depreciation rather than as an immediate expense.
Do not claim an item simply because it sits in the office. Ask whether it is used to earn business income and whether the records support the business share.
GST and home-office costs
GST treatment is not automatic. If you are GST-registered, check whether the invoice includes GST and whether the cost relates to taxable supplies. Mixed-use costs need an appropriate business-use treatment. Residential rent and many household costs can have special rules, so keep the calculation separate from the income-tax claim.
Practical checklist
- Measure the work area and total home area.
- Save household invoices in one folder.
- Choose a calculation method and write down why.
- Update the percentage if your work pattern changes.
- Keep records for at least 7 years.
Home-office claims can affect more than one tax calculation. This is general New Zealand information, not personalised tax advice.
Make the next step practical
Use the ideas here as a starting point for a better conversation. The right answer depends on your records, timing and circumstances, so keep the assumptions visible and revisit them when something changes.