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Ask LH: Can I Claim My NBN Installation Costs Against Tax?

Dear Lifehacker, There’s a lot of talk about what will happen to the NBN project now that the Coalition government is in. I’m wondering: if I now have to pay for the privilege of having fibre installed to my house or an investment property, can I claim this on tax? And if I can, would it be a one-off thing, or work under a depreciation model where it’s claimed in part over a number of years? Thanks, Tax Tactics

Home office picture from Shutterstock

Dear TT,

Short answer: you could, potentially, but it depends on the exact circumstances.

While the Coalition policy definitely does leave open the possibility of individual buildings (homes or businesses) paying extra to have a fibre-to-the-premises (FTTP) connection rather than the fibre-to-the-node (FTTN) model that is assumed to be the default wherever the copper connection is sufficient, we don’t yet have a pricing model for what that will cost. The cheapest estimates are around $900; the costliest $5000.

Whatever the final cost, standard tax rules will apply. (If you want specific tax advice for your situation, ask an accountant; we’re commenting on general principles here.)

  • If you’re connecting the NBN to your business premises, claiming those costs against income is non-controversial — it’s simply another business expense.
  • Similarly, if you’re the owner of a rental property, adding NBN connectivity qualifies as an improvement which could be offset against rental income.
  • You’d only be able to claim for a home NBN connection if you maintain a home office and use that for work, or if your employer requires you to have high-speed connectivity available (say you’re a support worker who might have to hook into IT systems). In that case, you can only claim a proportion of the expenses, and you’d need evidence such as a diary. This is no different to the current situation regarding internet expenses; you can potentially claim them, but you need to prove you need them for work, and have some idea what portion of your overall home usage is due to work. Trying to claim them in their entirety is likely to raise a red flag.

Depreciation is a more complex question. Small businesses with a turnover of under $2 million can claim items under $6500 immediately rather than depreciating them, which appears to cover even the highest estimates. Those rules may not apply if you’re an income earning using a home office, though since you’ll potentially only be claiming a portion of the amount the total might also be smaller.

Given the potentially long life of an NBN utility box, a chat with your accountant would definitely be in order — but it will be quite a few months before that’s possible (it might not even happen this financial year).

Cheers
Lifehacker

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