Tak­ing work home

Run­ning a busi­ness from your res­i­dence re­quires a lit­tle home­work, par­tic­u­larly on fi­nan­cial mat­ters, writes Amy Noo­nan.

The Advertiser - Real Estate - - Front Page -

THEY are the peo­ple who make their home work – lit­er­ally. As more peo­ple are choos­ing to work from home part time or even run their en­tire busi­ness from home, it pays to be aware of the fi­nan­cial im­pli­ca­tions.

The lat­est data from the Aus­tralian Bureau of Sta­tis­tics shows that 24 per cent of work­ers – some 2.4 mil­lion peo­ple – worked some hours at home in 2008.

Har­ris Real Es­tate man­ag­ing di­rec­tor Phil Har­ris says po­ten­tial buy­ers are de­mand­ing home of­fice space when look­ing for a new home.

‘‘With­out a doubt, we are see­ing more buy­ers look­ing for spa­ces in an ex­ist­ing home where a po­ten­tial of­fice could be set up,’’ Mr Har­ris says.

‘‘I have no­ticed a spike in these types of re­quests over the past 10 years as the work­ing environment con­tin­ues to change.’’

HLB Mann Judd tax and busi­ness ser­vices part­ner James Hooper says there are a mul­ti­tude of tax ben­e­fits to work­ing from home.

‘‘You can claim a per­cent­age of the run­ning costs of your house, which is based on the per­cent­age of to­tal floor area,’’ Mr Hooper says.

‘‘You might have one or two rooms set aside as an of­fice area and you work that out as a per­cent­age.’’

The claim list can in­clude clean­ing fees or of­fice prod­ucts, coun­cil rates, water bills and mort­gage pay­ments.

Any­one build­ing a new house or con­vert­ing a former com­mer­cial build­ing, such as a ware­house, into a home could claim a per­cent­age of build­ing costs, Mr Hooper adds.

‘‘You can claim cap­i­tal write-offs, the cost of build­ing work writ­ten off at 2.5 per cent.’’ And don’t for­get about fix­tures and fit­tings.

‘‘If you’re fit­ting out the of­fice with items like cur­tains and blinds, they’re now ca­pa­ble of be­ing de­pre­ci­ated.’’

How­ever, any­one plan­ning to claim needs to be aware of the fi­nan­cial flip side. ‘‘As soon as you start claim­ing part of your house as a place of busi­ness, claim­ing a per­cent­age of the mort­gage, your house is now sub­ject to cap­i­tal gains tax when you sell it,’’ he says.

‘‘When you sell the house, half of the cap­i­tal gain will be taxed at your rate of in­come and it could push you up into the next tax bracket.’’

Scott Sal­is­bury gen­eral man­ager Chris Schutze says peo­ple who build new homes are now re­quest­ing home of­fices, of­ten with sep­a­rate en­tries.

‘‘Stud­ies were al­ways nice to have but I think these days they are ac­tu­ally be­ing used as home of­fices,’’ Mr Schutze says.

Jade Pace, owner of Guys & Dolls hair and beauty, started work­ing from her home at Maw­son Lakes this year.

She doesn’t claim on the mort­gage be­cause of the cap­i­tal gains but she does claim on util­i­ties.

Ms Pace says work­ing from home is fi­nan­cially far bet­ter than work­ing in a sa­lon.

‘‘If you’re rent­ing a chair in a sa­lon, you still have to give a per­cent­age of your pay to the owner. If you go into busi­ness for your­self, there’s more over­heads – rent on a sa­lon, hav­ing to em­ploy staff to gain the ben­e­fits. It’s much cheaper run­ning a busi­ness from home,’’ she says.

How­ever, the main ad­van­tage for Ms Pace is the life­style.

‘‘I work in a great environment and there’s ab­so­lutely no com­mut­ing plus it’s a lot more per­sonal – be­ing my own busi­ness, I can fo­cus on clients one on one.’’


FO­CUSED: Busi­ness owner Jade Pace loves work­ing from her Maw­son Lakes home.

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