If you are conducting a business from your home, then you will be entitled to claim a portion of the following expenses for income tax purposes:
- Mortgage Interest or Rent
The amount of these deductions is normally based upon the percentage of the home that is used for business purposes, which is generally calculated on a square metre basis.
Where GST is charged on these home office expenses (i.e. rates, power etc), a GST claim can be made in respect of the portion of the business expenses, provided you are GST registered. You will need to retain these tax invoices to support your GST claim.
It is BLNZ’s policy not to claim depreciation for home office purposes as the eventual sale of the home will likely trigger a depreciation recovery issue, which will be subject to income tax. However, if depreciation has been calculated in the past then you must continue to do so.
Unless you keep records to show the contrary, the IRD allows a deduction for 50% of the domestic phone rental, where the phone is used for both private and business, and the business element is reasonably significant.
In addition to this any specified business cellphone or toll calls may also be claimed.