Running a Business From Home in Australia: Practical Considerations

Working from home suits a growing number of Australian sole traders and small businesses. It reduces overheads, removes commuting and allows flexible hours. It also creates questions that are easy to overlook, about council rules, insurance, tax deductions and the boundary between work and personal life.

Check what your council allows

Local councils regulate how residential properties can be used. Many allow a home occupation, but conditions often apply. Typical considerations include:

• Whether customers or clients will visit the property, and how often.
• Parking and traffic impact on neighbours.
• Signage and advertising on the property.
• Noise, odours, storage of materials or hazardous goods.
• Whether you employ staff who would work at the property.

If you rent, check your lease as well, because many residential tenancy agreements restrict business use. Speaking to your council before you start is far easier than resolving a complaint later.

Review your insurance

Standard home and contents insurance usually does not cover business activity, stock, tools or public liability arising from your work. Depending on what you do, you may need public liability cover, professional indemnity, or cover for equipment and stock. If clients visit your home, liability exposure increases. An insurance broker can help you identify what applies to your situation.

Keep tax and record keeping simple

If you are running a business, you generally need an Australian Business Number, and you may need to register for GST once your turnover reaches the registration threshold. Records should be kept for the required period and should clearly separate business and personal transactions.

If you use part of your home for work, you may be able to claim a deduction for running expenses such as electricity, internet or a portion of your occupancy costs. The rules differ depending on whether you claim a fixed rate or actual costs, and claiming occupancy expenses can affect the capital gains tax exemption on your home. Professional advice is worthwhile here.

If you need equipment, vehicles or tools, finance may be part of the picture. Lenders assess your history, and poor credit can affect your options, as this guide to bad credit and vehicle finance explains.

Separate work from home life

Without a commute, the working day can expand in both directions. Simple habits help: a defined workspace, a start and finish time, and a routine that signals the end of the day. If your household is busy, headphones, scheduled calls and clear expectations with family members make a real difference.

It also helps to leave the house for work sometimes. Libraries, cafes and shared workspaces provide a change of scene and reduce isolation. A coworking space can also give you a professional address for meetings and access to a network of other small business owners.

Know when to move out

There are signs that home is no longer the right base: you need storage, you are hiring, clients need to visit regularly, or the household has run out of patience. Options include renting a small commercial space, sharing premises with a complementary business, or using a coworking membership as a stepping stone.

Promoting a home-based business

Customers generally care about the quality of your work rather than your address, but they do need to find you and trust you. A clear website, an accurate local listing and consistent communication all matter. If you decide to bring in outside support, it is worth taking time to choose a digital marketing agency that understands small operators and reports on results clearly.

Frequently asked questions

Do I need council approval to run a business from home?

Not always, but many councils require a home occupation approval or impose conditions. Check with your local council before you begin trading.

Can I claim my internet and electricity as a business expense?

Often yes, for the business portion of the expense. Keep records showing how you calculated the business share, and seek advice on occupancy claims.

Will working from home affect capital gains tax?

It can, if you claim occupancy expenses rather than running expenses. Discuss your circumstances with a registered tax agent before making claims.

Frequently asked questions

Do I need council approval to run a business from home?

Not always, but many councils require a home occupation approval or impose conditions. Check with your local council before you begin trading.

Can I claim my internet and electricity as a business expense?

Often yes, for the business portion of the expense. Keep records showing how you calculated the business share, and seek advice on occupancy claims.

Will working from home affect capital gains tax?

It can, if you claim occupancy expenses rather than running expenses. Discuss your circumstances with a registered tax agent before making claims.