Can I Claim Home Office Expenses (New Zealand) as a Business Expense in New Zealand?
Home office expenses are partially deductible based on floor area and time used exclusively for business. IRD uses the floor-area method: business proportion = (office sqm / total home sqm) x (business days / total days).
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What Inland Revenue (IRD / Te Tari Taake) says
IRD gives two ways to claim. The first is actual costs, where the business share of rates, insurance, power and mortgage interest follows the area of the home used for business. The second is the square metre rate, which is available if the business area is set aside and used mainly for business. The rate is NZD 57.30 per square metre for 2025-26 (NZD 55.60 for 2024-25). The square metre option replaces other claims for the home, so no other expenses or depreciation for business use of the home can be claimed with it.
When you can claim
- A dedicated room used exclusively as a business office, proportioned by floor area and days used for business
- Power, rates, mortgage interest (not principal), rent, and contents insurance apportioned by the business-use ratio
- Cleaning and maintenance costs for the home apportioned by the business-use ratio
- Square metre rate of NZD 57.30 (2025-26) multiplied by the business area, as an alternative to actual costs
When you cannot claim
- Mortgage principal repayments: only the interest component qualifies
- Depreciation on the home building itself (buildings depreciate at 0% under NZ tax rules)
- A shared family room or corner of a bedroom that is also used privately: the space must be exclusively for business
- Depreciation on the home itself, and any other home expense when the square metre option is used
Good to know
Pro tip: Maintain a simple floor plan sketch and a diary or calendar showing business use days. IRD sometimes accepts a simpler area-only calculation if the space is exclusively dedicated: document this clearly to support the claim. Phone and internet are separate. If the landline is also your private line, IRD allows 50 percent of the rental, and business toll calls are fully deductible. A separate business line is fully deductible for income tax and GST, adjusted for any private calls. For internet, claim a business proportion that gives a fair and reasonable result.
Important: GST-registered businesses using the flat-rate method cannot separately claim GST on home costs apportioned to business. There is no flat daily rate like the UK or Australian systems. The square metre rate is the only published rate. If a company pays nothing toward home office costs it cannot claim an expense. If the company reimburses a shareholder-employee, it can claim an expense once it shows the link to its income and keeps records of how the payment was calculated. A fair reimbursement is exempt income for the employee. A GST-registered claimant leaves GST out of the figures, and a person who is not GST-registered includes it.
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