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32% on 2026–27 resident rates, incl. Medicare levy
Your work at home
Your own business (sole trader or partnership). Tap “Add a job” if you also work from here as an employee.
Mortgage interest, council rates, land tax, home insurance
Add the home’s values (optional — sharper figures for a sale after June 2027)
With these, the gain to 30 June 2027 is split by value (the law’s default), and growth after it is estimated under the new rules: CPI indexation at an assumed 2.5% a year and at least 30% tax.
Running costs — claimable from a desk or a place of business
The 2026–27 rate is not published yet. The 2025–26 rate (70c an hour) is used as an estimate only — or use actual costs.
Which is better for me?
Fixed rate: $700 a year
1,000 hours at 70c an hour
Records: the actual hours worked from home for the whole year, and one record (such as a bill) for each expense the rate covers.
Actual cost: not worked out yet
Choose actual costs and enter your bills to compare.
Records: the bills, and a record of use such as a representative 4-week diary.
Depreciation of equipment and furniture is claimed separately under either method.
On these figures
Better optionKeep it a desk or shared room — about $648 better off to 30 June 2027
To 30 June 2027 the occupancy deductions are worth $2,150 against $2,798 of CGT on growth to then. After that, a place of business adds deductions worth $2,150; at today’s rules the later growth would add about $2,802 of CGT, so the answer holds, but the rules from July 2027 could change it.
Break-even growth over the whole period, at today’s rules: about $76,800. Less growth than that, and the deductions are worth more; more, and the tax on sale is larger.
The verdict weighs the years to 30 June 2027, where the current rules apply. From 1 July 2027 the law treats the asset as sold just before that date at market value (or, by choice, by an apportionment method the Minister sets — so far only a draft); the gain to then keeps the 50% discount and is taxed when you sell. Later growth gets CPI indexation and a 30% minimum tax; add the home’s values for an estimate of it.
Timing is ignored: deductions come each year, the tax at the sale.
Running costs are claimable either way, so they don’t change which option is better.
A desk or shared room
Better- Running costs a year
- $700
- Occupancy costs a year
- $0
- Tax value of the deductions over 4 years of use (2025–26 to 2028–29)
- $896
- CGT on this space
- $0
Your main residence exemption stays whole.
Set aside only for the business (a place of business)
Worse- Running costs a year
- $700
- Occupancy costs a year
- $3,360
- Tax value of the deductions over 4 years of use (2025–26 to 2028–29)
- $5,197
- CGT on this share of growth to 30 June 2027
- $2,798
- 50% CGT discount
- Applies
That share of the gain is outside your main residence exemption.
What the place of business changes
- Occupancy deductions worth, to 30 June 2027
- $2,150
- CGT on this share of growth to 30 June 2027
- − $2,798
- Net for a place of business, to 30 June 2027
- −$648(worse)
- Occupancy deductions worth, after 30 June 2027
- $2,150
- CGT on the later growth, at today’s rules (for scale)
- − $2,802
- Break-even growth (whole period, today’s rules)
- $76,800
Law from 1 July 2027
Growth after 30 June 2027 is under the new rules
For an individual, an asset held then is treated as sold just before 1 July 2027 at its market value — or, by choice, split by an apportionment method the Minister sets, which so far is only a draft. The gain to that date keeps the 50% discount and is taxed when you actually sell. Growth after it gets cost-base indexation by CPI and a 30% minimum tax instead of the discount. The main residence exemption itself is unchanged; the Act doesn’t say anything specific about a home used partly for business.
Treasury Laws Amendment (Tax Reform No. 1) Act 2026, as made — ss 112-155, 112-160, 112-185 (deemed sale just before 1 July 2027), s 110-36 (indexation), Div 119 (30% minimum tax) (read 28 Sep 2026); Explanatory Memorandum — Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 (read 28 Sep 2026); Treasury — exposure draft: Method for Apportioning Capital Gains and Capital Losses Determination 2026 (consultation closed 21 Aug 2026; not yet made) (read 28 Sep 2026)
- Running costs are claimable from a desk or shared room as well as from a place of business. source (read 27 Sep 2026)
- Occupancy costs are claimable only if the area is a genuine place of business. source (read 27 Sep 2026)
- Occupancy is apportioned by floor area: 35% here. source (read 27 Sep 2026)
- As a place of business, the same share of the home loses the main residence exemption. source (read 27 Sep 2026)
- The taxable gain is measured from the home's value when business use started. source (read 27 Sep 2026)
- Held at least 12 months from first business use, so the 50% discount applies under the current rules. source (read 27 Sep 2026)
- If your income is personal services income, some occupancy costs may not be deductible. source (read 27 Sep 2026)
- The small business CGT concessions will rarely apply to a home used mainly as a home. source (read 27 Sep 2026)
- The sale is on or after 1 July 2027: the gain to 30 June 2027 uses the current rules; the later growth is shown at today’s rules for scale only. source (read 27 Sep 2026)
- A 30% minimum tax may apply to gains accruing after 1 July 2027, unless an exception in Division 119 applies. source (read 27 Sep 2026)
- One main residence at a time — apart from up to 6 months when moving house. ATO — Moving to a new main residence (last updated 22 Jun 2026; read 27 Sep 2026)
- Couples share one: choose one home for both of you, or each nominate a different one and split the exemption. ATO — Living separately to your spouse or children (last updated 22 Jun 2026; read 27 Sep 2026)
- A part of the former home used as a place of business before you moved out can’t be covered after you leave. ATO — Treating former home as main residence (last updated 22 Jun 2026; read 27 Sep 2026)
On these figures
Better optionKeep the former home as your main residence — about $4,800 better off
It leaves $33,600 of CGT against $38,400: less of the faster-growing home’s gain falls outside the exemption.
The tax falls in different years: each home’s share is taxed when that home is sold.
Keep the former home as your main residence
Better- Former home exempt for
- 6 yrs
- Former home not exempt for
- 2 yrs
- New home not your main residence for
- 6 yrs
- Growth left outside the exemption
- $210,000
- CGT on that growth
- $33,600
Earning income, it can stay your main residence for up to 6 years per absence; after that the new home takes over here.
Make the new home your main residence
Worse- Former home exempt for
- 0 yrs
- New home exempt for
- 8 yrs
- Growth left outside the exemption
- $240,000
- CGT on that growth
- $38,400
The former home’s growth since you moved out is taxed when you sell it.
Law from 1 July 2027
Growth after 30 June 2027 is under the new rules
For an individual, an asset held then is treated as sold just before 1 July 2027 at its market value — or, by choice, split by an apportionment method the Minister sets, which so far is only a draft. The gain to that date keeps the 50% discount and is taxed when you actually sell. Growth after it gets cost-base indexation by CPI and a 30% minimum tax instead of the discount. The main residence exemption itself is unchanged; the Act doesn’t say anything specific about a home used partly for business. These figures apply the discount to every year entered, so they hold only for growth to 30 June 2027.
Treasury Laws Amendment (Tax Reform No. 1) Act 2026, as made — ss 112-155, 112-160, 112-185 (deemed sale just before 1 July 2027), s 110-36 (indexation), Div 119 (30% minimum tax) (read 28 Sep 2026); Explanatory Memorandum — Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 (read 28 Sep 2026); Treasury — exposure draft: Method for Apportioning Capital Gains and Capital Losses Determination 2026 (consultation closed 21 Aug 2026; not yet made) (read 28 Sep 2026)
The facts decide which one fits, not a choice you make: who they are, whether it’s a rental arrangement (rent for their room, agreed in writing or not) or just sharing the bills, and whether they have a room of their own. ATO — Rental income you must declare (domestic arrangements, TR 2026/1) (last updated 21 May 2026; read 27 Sep 2026)
Interest, rates, strata, insurance, energy, internet
A lodger paying rent — the going rate, for their own room
- Their share of the floor area
- 26.25%
- Rent (taxable income) a year
- $13,000
- Deductions for their share a year
- − $5,250
- Tax on the net rent a year
- $2,480
- CGT on their share of growth to 30 June 2027
- $2,099
- Received to 30 June 2027, less all of that tax
- $18,941
- After that: rent less tax, less about $2,101 of CGT on the later growth at today’s rules (for scale)
- $18,939
Rent is income, costs for their share are deductible, and that share of the gain is outside the exemption.
The verdict weighs the years to 30 June 2027, where the current rules apply. From 1 July 2027 the law treats the asset as sold just before that date at market value (or, by choice, by an apportionment method the Minister sets — so far only a draft); the gain to then keeps the 50% discount and is taxed when you sell. Later growth gets CPI indexation and a 30% minimum tax; add the home’s values for an estimate of it.
- Rent is assessable and the let share (26.25%) of home costs is deductible. source (read 27 Sep 2026)
- The let share of the gain, for the days let, is outside the main residence exemption. source (read 27 Sep 2026)
- If you lived there before letting, the gain is measured from the value when letting began. source (read 27 Sep 2026)
- Held at least 12 months from first letting, so the 50% discount applies. source (read 27 Sep 2026)
- The sale is on or after 1 July 2027: only the gain to 30 June 2027 is worked out here, under the current rules. The rest is not computed. source (read 27 Sep 2026)
- A 30% minimum tax may apply to gains accruing after 1 July 2027, unless an exception in Division 119 applies. source (read 27 Sep 2026)
Two other things this rent can touch
- Centrelink: for the income test, board and lodging money is counted at a set share — 70% of it for a room only, 50% with breakfast, 20% with full board — and not at all if the lodger is your parent, child, brother or sister. DSS Social Security Guide 4.3.8.40 — Income from boarders or lodgers (last updated 21 Sep 2026; read 28 Sep 2026)
- The Australian Government 5% Deposit Scheme: to keep the guarantee you must go on living in the home as an owner-occupier. Ask your lender before letting part of it. Australian Government 5% Deposit Scheme (firsthomebuyers.gov.au) (read 28 Sep 2026)
If the facts were different
- If instead they were paying toward the bills (sharing the household costs): not income, nothing to deduct, and your main residence exemption stays whole.
- If instead it were family paying rent for their room, below the going rate: $13,000 a year is income, $5,250 of costs is deductible, so tax of about $2,480 a year.
Law from 1 July 2027
Growth after 30 June 2027 is under the new rules
For an individual, an asset held then is treated as sold just before 1 July 2027 at its market value — or, by choice, split by an apportionment method the Minister sets, which so far is only a draft. The gain to that date keeps the 50% discount and is taxed when you actually sell. Growth after it gets cost-base indexation by CPI and a 30% minimum tax instead of the discount. The main residence exemption itself is unchanged; the Act doesn’t say anything specific about a home used partly for business.
Treasury Laws Amendment (Tax Reform No. 1) Act 2026, as made — ss 112-155, 112-160, 112-185 (deemed sale just before 1 July 2027), s 110-36 (indexation), Div 119 (30% minimum tax) (read 28 Sep 2026); Explanatory Memorandum — Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 (read 28 Sep 2026); Treasury — exposure draft: Method for Apportioning Capital Gains and Capital Losses Determination 2026 (consultation closed 21 Aug 2026; not yet made) (read 28 Sep 2026)
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