It sounds so nice, building a home office. Great if you want to work from home, full time, or a few days a week. But do you actually know whether the tax authorities will be okay with this? Regardless of whether you are allowed to build at all, of course, because with that application you first have to go to the municipality again.
I personally don’t find it very clear myself and I’ll tell you why.
Build a home office?
We moved into our current home four years ago. In our old house I had a home office. With separate entrance. And since I’ve been working full-time in and on my company for years, it never occurred to me that this home office is not really seen as a home office by the tax authorities.
I must honestly say that we did not have to build an office at home, but that it remained with renovation to create a home office. Also totally fine of course. But that part of the house did have a real office function.
Just like the office in our new house where we moved in four years ago. We didn’t have to build a new building here either. But we have converted a large old garage into a home office. So this time I again consulted the tax authorities.
Not only to find out what the possibilities are for the office renovation costs, but also what the possibilities are in terms of office furniture in the broadest sense of the word and my PC and the like.
Small print Tax authorities
When is a home office actually deductible when building or renovating? This turns out to be the case in far fewer cases than you might think. And then I’m not just talking about the office itself, but also about everything that is in your office in terms of furniture.
Because if you expect that your office cupboard or other office furniture, such as a desk, a printer or your own coffee corner, are just deductible at a home office, then that is still the question.
Does your office have its own entrance and a separate kitchenette and toilet? Even then the tax authorities are not really clear. And moreover, there are a number of snags to the whole situation, which makes you wonder whether it is really interesting to build an office at home as a deduction. Here you will find more information about this.
What does the tax authorities think of a home office (have it built)
With the link above you can check whether you are eligible for the deductions for a home office, whether you have it built or whether it is already there.
When completing the questionnaire, our situation shows that we can state the home office as a deductible item. However, an inspection by the tax authorities shows that – for all kinds of unclear reasons – they believe that this is not the case.
Even though we have an office with a separate entrance and our own sanitary facilities, it is used for more than 90% as an office and we could rent it out separately to third parties.
Just when specifying the purchase of office furniture such as an office cabinet, a desk, a desk plant, a computer and all that kind of stuff, only the computer is accepted by the tax authorities. That is actually bizarre.
It’s the little snags that made us decide to let it all go. Because if you have an office built at home, or it is an existing space that meets the above conditions, there are a few more rules that you have to take into account.
Consequences of a home office as a tax deduction
The IRS says the following:
Do you have a mortgage on the property? Then you must state the part of the mortgage for the workspace as a debt on the balance sheet. You do this once at the start of the company or when the property is used for the first time for your company.
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Will you later stop your business or sell the property? Then you must take into account the result you achieve with the sale (for the part of the workspace) or the transfer to your private assets.
So it may seem very beneficial to build a home office because you think you have a lot of deductions apart from the office furnishings and such. Such as rent, energy costs and more of that kind.
But in the end it turns out that you will have to pay at the end of the ride if you stop your business or if you sell your house (with office).
What does the accountant think of this situation?
On the advice of our accountant, we let the whole situation go. Even though I work full time in and on my internet business from home and we have a home office that is really only used for that.
They also think it is too much hassle for a few euros with all the associated risks. The last condition is especially exciting. Because what will it ‘cost’ you if you sell your house for a profit? Settlements will then be made for the office part.
My only deductions in my own business
As deductions within my own company, I only have the purchase of my PC and my mobile (oh yes, and the printer). No office furniture such as desks and special office cabinets, and the coffee is also paid for from the private purse.
Apart from the salaries that have to be paid, of course, we can include these as costs.
All in all, it all sounds more interesting than it might be. So do you want to build a home office? And do you have permission from the municipality? Then I would say: Do it! But simply because of the benefits of working from home; it is ideal to keep work and private life somewhat separated.
Hi, welcome to lifestyle blog MamsatWork. I am Joyce, content creator and internet entrepreneur, married and mother of an adolescent and a teenager.
This platform has grown from a personal blog into a lifestyle platform where new articles appear daily. A versatile blog with topics such as lifestyle, interior, food, entrepreneurship, education, travel, outings, fashion and DIY.
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