Can sole traders claim home office expenses?

Understand when sole traders may be able to claim home-based business expenses and what the ATO says about running a business from home.

Summary

If you operate some or all of your business from home, you may be able to claim deductions for the business portion of expenses. The ATO distinguishes between home-based business running expenses and occupancy expenses in some circumstances.

What this means

The amount you can claim depends on how your home is used for business. If your home is only used occasionally for work, the deduction position may be different from a situation where part of the home is set aside as a place of business.

For sole traders, the ATO has specific guidance about home-based business expenses, including possible capital gains tax implications when part of the home is used for business.

Typical actions

  • Identify whether your home is used partly or mainly as a place of business.
  • Separate private and business use.
  • Keep records of expenses.
  • Work out the business-use portion.
  • Check possible CGT implications if part of your home is used for business.

Official ATO sources

Last checked: 20 June 2026

Deductions for home-based business expenses
Explains the general rules for home-based business deductions.

Home-based business expenses — sole trader or partnership
Explains rules for sole traders and partnerships.

Home-based business and CGT implications
Explains possible capital gains tax implications.

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Important notice: Tax Clarity is an independent information tool. This page provides general information based on official sources. It does not provide tax, legal, financial, or accounting advice. Tax rules can change, and how they apply depends on your circumstances. For advice about your situation, speak with a registered tax agent or qualified professional.

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