Home Office build/renovation experience

Poor_old_gill

Hi folks,

I have my own business and run it exclusively from home - however we have had 2 kids in the last 2 years and the requirement for extra home office space is becoming fairly pressing.

Has anyone built a home office or renovated an attic for this purpose? What are the tax implications or can it be viewed as a business expense?

Any experience/stories would be great

downtheroad

I bought a garden room (from gardenhouse24.com - would recommend) and kitted it out. Will be claiming the whole cost as a capital allowance over 8 years. Its used exclusively for my business.

downtheroad

Just to come back and add to this. PPR relief on CGT can be affected by running a business from the house, so be cautious if you build on an office room.

https://www.revenue.ie/en/gains-gifts-and-inheritance/cgt-reliefs/principal-private-residence-ppr-relief.aspx

Furze99

https://www.boards.ie/discussion/comment/120487238#Comment_120487238

Does the example given by Revenue cover the various angles I wonder? I always thought that you could run a business from a home office but as long as you don't claim tax relief on the purchase of the business portion of the property, that no liability attaches.

So keep it simple: a person earns €300K on which they pay all income taxes etc. They purchase a family house for €300K and then use a room within it equating to 10% of property area. It's hardly equitable from any logical POV if they then have to pay some CGT if the €300K house is sold for €400K subsequently. Or if they can claim back some credit if it only resells for €200K. That'd be a form of double taxation.

What seems logical is if the person buys their €300K family house, then builds a €100K home office outside and claims cost of this against tax as capital asset depreciation - that if they then sell for €400K, that CGT should be due.

But that's not what Revenue example seems to infer.

downtheroad

https://www.boards.ie/discussion/comment/120487376#Comment_120487376

With so many working from home nowadays I wonder is this a Revenue rule that needs looking at. I'd imagine the rule was made when people operated pubs, shops, motor garages etc from their properties.

Poor_old_gill

Thanks for the responses folks - I'm still a little confused as to what I can do but from the above my understanding is:

I can build an office in the back garden and claim the money back as a tax deduction over 8 years, is that correct?

ThreeGreens

Get your accountant to check into that.

I'm not at all convinced that you can claim capital allowances on that. You can't normally claim capital allowances on an office building. Not sure why it being a temporary structure in your back garden would change that.

downtheroad

https://www.boards.ie/discussion/comment/120523133#Comment_120523133

In that case the cost could be deemed as an expense incurred wholly and exclusively for the running of the business, and be fully written off in the year of purchase?

Poor_old_gill

https://www.boards.ie/discussion/comment/120555974#Comment_120555974

I've been chasing my accountant for clarity but he doesnt seem to know much and just sends back links to the revenue site.

I have a 4 month old - who will be moving into his own room in the next few months which means that I'll just have to prob go rent an office space somewhere.

downtheroad

https://www.boards.ie/discussion/comment/120557981#Comment_120557981

The office rental cost will definitely be an allowable expense for the business.

If there is a garden room acting as your office and Revenue looked into it they could argue you use it for both business and personal use, but if its only your office then there has to be a way it can be included in the business accounts.

ThreeGreens

https://www.boards.ie/discussion/comment/120555974#Comment_120555974

No. The cost of purchasing a premises where you work from is not a trading expense. (Some technical exceptions).

Renting is different, but I don't think there is any rent involved here.

The question that needs consideration is could a temporary structure be considered plant and machinery rather than a premises. I'm not convinced that it could, but their accountant needs to check into that for them.