Home-based businesses
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:
- tax file number (TFN)
- Australian business number (ABN)
- goods and services tax (GST)
- pay as you go (PAYG) withholding
- fringe benefits tax (FBT).
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.
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.
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.
Search nowFind 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.
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