Home and assets

Employee home-office occupancy review

Rent, mortgage interest, rates or home insurance only where part of an employee's home genuinely has the character of a place of business.

Reviewed 30 July 2026Income years 2025-26 and 2026-27

Who can claim

This deduction is available to individuals.

  • Your work circumstances make the home office your sole base of operations because your employer provides no alternative work location.
  • The area is used exclusively or almost exclusively for work and is not readily capable of private or domestic use.
  • The facts show the area has the character of a place of business rather than a convenient private study.

What you cannot claim

  • Do not include a private or domestic portion.
  • Do not claim an item or cost your employer or another party provided, paid or reimbursed; if partly reimbursed, claim only the unreimbursed eligible portion.
  • A taxable allowance is generally declared as income. It does not automatically create or prevent a deduction; claim only the actual eligible amount you incurred.
  • Working at home by choice or convenience does not make rent, mortgage interest, rates or home insurance deductible.
  • A desk, shared room or ordinary study that remains readily available for private use is not a place of business.
  • Running costs already claimed under the fixed-rate or actual-cost method are not occupancy expenses.

How the amount is worked out

Where the strict place-of-business test is met, apportion eligible occupancy costs by a reasonable floor-area basis and, where relevant, the period the area had that character. Entitlement to deduct mortgage interest or similar occupancy costs can reduce the main-residence CGT exemption when the home is sold, whether or not you actually claim the deduction.

Records the ATO expects

  • Home-cost records
  • Floor-area and time calculation
  • Evidence no alternative workplace was provided
  • Evidence of exclusive or almost exclusive work use
  • CGT cost-base and use records

Before you rely on this rule

Employee occupancy expenses are exceptional and can affect the main-residence CGT exemption. Review the place-of-business facts before claiming.

Where this rule comes from

Primary source: ATO TR 93/30 home office expenses (TR 93/30 consolidated version). Reviewed 30 July 2026. Covers the 2025-26 and 2026-27 income years.

Supporting sources:

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