If you are working from an office, including a home office, it is possible to claim your next art purchase as a tax deduction prior to Thursday 30th June 2022. The “ Instant Artwork Write-Off” recognises artwork as both an investment and an asset.
Technically the write-off can be claimed until 30 June 2023, as long as the art is bought and ready to be installed by 30 June 2022,” explains Michael Fox, Principal of Michael Fox Arts Accountant & Valuer. The threshold has been raised from $30,000 to $150,000 per artwork. This means business owners can now claim up to $150,000 per artwork, and there are no limits on how many artworks you can claim.
There are a few conditions to consider. “The artworks must be displayed in [the business] premises,” says Fox. “If you are a small business and work from home, you need a distinct home office area (enclosed with doors) and you must hold meetings there. The artwork must be tangible and capable of being moved.” Fox adds, “If you are an employee and work from home, you can use the pooling rules to claim artworks to a value of $1,000.”
When asked about the benefits of using this tax incentive, as opposed to financial years gone past, he explains, “Normally artworks cannot be claimed at all or if they are, only at a rate of 1% per year for expensive works. If you pay tax at a marginal rate of 40% and you claim a deduction of $10,000 on an artwork purchase, the government is essentially giving you a rebate of $4,000 to acquire it.”