Home Office Tax Claims: What SARS Allows (And What It Doesn’t)

14 Oct

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Working from home sounds like a dream, until tax season comes. If you’re trying to deduct home office expenses from your tax return, the updated SARS Interpretation Note 28 provides the rules. Below we explain what you need to know if you’re employed, work from home, and want to claim your home office costs. Hint: not everyone qualifies, and not every cost counts.

Who Can Claim Home Office Deductions?

If you’re a salaried employee or hold an office and work mainly from home (that means more than 50% of your total work time for the tax year), you might qualify. But SARS is strict:

You need a dedicated space used only for work. This space should not be used for any other purpose. If you have an office equipped with a bed, SARS will most likely disallow the deduction.
That space must be specifically equipped with all the items that is expected to be used in your profession or trade (desk, chair, computer, Wi-Fi router).
You must not use it for anything else, no sharing it with the kids, Netflix, or your spouse’s side hustle.

If your job involves earning mainly commission (more than 50% of your income), you have more flexibility. But salaried employees have limited allowable deductions.

What Qualifies as a Home Office?

According to SARS, your home office MUST BE:

A separate room or clearly divided space.
Exclusively used for work purposes.
Used regularly, not just the odd Friday.

🔵An Example: If you work four days a week from your dining table, but it’s also used for meals and homework, sorry, that’s not exclusive use.

🔴Better example: You’ve converted your spare room into a proper office with a desk, chair, printer, and you do not use the office for anything else. Now we’re talking - you have a better chance of getting the claim right.

Shared spaces are tricky. If you and your spouse share a room but work in separate, specifically equipped areas, SARS may accept this if you can prove each person uses their section exclusively.

What Expenses Can You Claim?

Once you qualify, you still can’t claim everything. Here’s what SARS allows:

Rent (if you’re renting)
Rates and taxes (a portion)
Electricity
Cleaning
Repairs to the home office part only
Security costs (e.g. alarm system)
Wear and tear on work equipment (desk, chair, computer, etc.).

Apportionment of Expenses for the Home Office

SARS uses a floor-space formula. If your office is 10m² and your whole house (including garage and outbuildings) is 100m², you can claim 10% of allowable costs.

📊 Example: Apportioning home office expenses based on m²

Total property size (including garage & outbuildings): 150m²
Dedicated home office size: 15m²
➡️ That’s 15m² ÷ 150m² = 10%

You can claim 10% of qualifying expenses, for example like these:

Bond interest: R72,000
Rates & taxes: R18,000
Electricity & water: R24,000
Office-specific repairs: R3,000
Cleaning: R6,000

💡 Your home office deduction for the year would be:

Bond interest: R72,000 × 10% = R7,200
Rates & taxes: R18,000 × 10% = R1,800
Electricity & water: R24,000 × 10% = R2,400
Office repairs (100% allowed): R3,000
Cleaning: R6,000 × 10% = R600
➡️ Total deductible = R15,000

What You Can’t Claim

Even if you pass all the tests, some costs are off-limits, especially if you’re on a fixed salary:

Bond interest (unless you earn mainly commission)
Bond and household insurance
Solar panels, inverters, or generators (if permanently fixed)
Fibre installation and monthly fees
Phone/data contracts
Stationery
Tea, coffee, and other refreshments
Sectional title levies (related to common property).

What About Capital Gains Tax?

Claiming home office deductions could cost you later. When you sell your home, you normally get a R2 million capital gains exclusion.

But if part of your home was used for work, you lose that exclusion on that portion. SARS says you must apportion the gain based on the area used for business and the period it was used.

🔍Example: CGT implications of home office claims

If your 10m² home office makes up 10% of your 100m² home, and you and you claimed expenses for 5 of the 10 years you owned the house (50% of the time), 5% of your capital gain won’t qualify for the R2m exclusion.

The facts are as follows:

Purchase price (base cost): R1,000,000
Sale price (10 years later): R2,500,000
Capital gain: R1,500,000

💼 Home office claims during this time were as follows:

Home office = 15m²
Total property = 150m²
Business-use % = 10% (15m² / 150m²) - this is reduced by 50% as the home office expenses were claimed for 50% of the time (5/10 years) = 5%

💸 CGT Impact:

Normally, the primary residence exclusion protects R2 million of the gain.
But SARS reduces this proportionally if part of the home was used for business.

Here’s how it plays out:

Primary residence portion (90%) = 95% × R1.5m = R1,425,000
Home office portion (10%) = 5% × R1.5m = R75,000 ← fully taxable

Now apply the R2 million exclusion only to the personal-use portion:

Personal-use gain: R1,425,000 – R2,000,000 = R0 CGT
Business-use gain: R75,000 = Fully taxable

🧮 CGT Calculation (Natural Person):

Inclusion rate: 40%
Taxable capital gain: R75,000 × 40% = R30,000
If your marginal tax rate is 30%, actual CGT = R9,000

Required Documentation for Home Office Deduction

Be audit-ready. Keep records for five years, including:

Detailed Expense Schedule
- A breakdown of each amount claimed and clear apportionment calculations (e.g., floor-space %).
Proof of Space Usage
- A floor plan with actual dimensions, showing:
  - The home office space in m²
  - Total space (m²) of all other areas of the property (including garages and outbuildings).
Photographs of the home office showing:
- Exclusive use of the home office including the specific equipment used for work. A 360 degree photograph is recommended to show the full office.
Proof of Expenses & Payments
- Municipal accounts for rates, taxes, electricity, water, waste
- Bond statements showing interest portion (for commissioner earners only)
- Insurance policy copy + proof of payment
- Lease agreements if renting, plus payment proof
- Repairs invoices and payment proof
- Invoices for assets used in trade i.e. laptops, desks, etc. if wear-and-tear is claimed.
Work Evidence
- Schedule showing which days you worked from home
- Proof that more than 50% of duties were done in the home office
- Letter from employer confirming:
  - Permission to work from home
  - Dates or periods worked remotely.
Additional Evidence (if needed)
- Affidavits for unusual arrangements (e.g., shared spaces clearly divided)
- Security or access records (e.g., office entry logs).

Final Thoughts

Claiming a home office deduction isn’t as simple as uploading your Eskom bill. SARS has tightened the rules and expects proof. If you can’t show that your space qualifies or that your costs are valid, your claim could be rejected.

Want to check if you qualify? SARS has a home office questionnaire to guide you.