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A home-based business is one where your home is also your principal place of business. You run your business at or from home, and have a room or space set aside only for business activities.

Due to COVID-19, many people have been operating their businesses from home and have realised the benefits.

However, running a business from home permanently doesn’t suit everyone. It takes a lot of discipline to establish, run and maintain a home-based business. 

Your local business adviser can help you work out whether your home and your business are a good match in the long term.

Work-life balance


When you start a home-based business you need to establish boundaries between work and home life. To separate these you can:

  • set up a dedicated work space
  • have a second business mobile
  • schedule your own business working hours

These suggestions will help you maintain a work/life balance. It's important to prioritise balance so you don’t become overwhelmed by your new business. It can also help you to identify which deductions you can claim as part of your tax obligations.

Tax, insurance and registrations


Tax obligations

As with any new business, you must comply with tax obligations. You may need to register for:

Home-based businesses have specific tax obligations that you need to know. You’ll need to know what expenses you can claim and whether you have to pay capital gains tax when you sell your home.

To make it easier for people to claim deductions for working from home due to COVID-19, the Australian Taxation Office (ATO) are accepting a temporary shortcut method for calculating home office expenses from 1 March 2020 until 30 June 2021. This allows you to claim a rate of 80 cents per hour for all additional running expenses.

Learn more about COVID-19 deductions for home-based businesses on the ATO website.

Understand what deductions you can claim and capital gains tax implications.

Insurance

Running a home-based business is no different from running a business based out of an office. It depends on the type of work you do, but you may need to consider:

  • public liability
  • professional indemnity
  • product liability

Public liability is important if you have clients that come into your home as part of your business. 

Read about the different types of insurance for business.

Licences and registrations

Using your home as a place of business means you need to comply with particular regulations. These can be set by your state, territory and local governments. The registrations and licences you need for your business will vary depending on your industry.

If you have a home-based business, you still need to register for a business name, ABN and required business licences and permits.

Some business activities may impact your surrounding residential area. Depending on your type of business, you may need special permits relating to zoning, signage, noise levels or health issues.

Find the licences and permits you need for your business

Search the Australian Business Licence and Information Service (ABLIS) to find information on the licences you may need.

Find advice and support


Search our advisory services to connect with a range of services, programs and business advisers to support your business.

Business Enterprise Centres provide information and advice to businesses. They can help support and guide you as you develop your business.

Networking is another important way to keep up-to-date with business trends. It can also help to create business opportunities and develop relationships. Consider joining a business association or find events where you can network with peers.

Running a home based business

 

This case study was produced by the Queensland Government at Business Queensland.

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