When you think of tax time, art doesn’t usually spring to mind, but did you know that you may be eligible to claim artwork as a tax deduction this financial year?
The Australian Taxation Office, views artwork as both an investment and a deprecating asset, which means artwork may be claimed as a deduction. The amount you can claim varies based on your employment status or if you are a business owner.
If you work from home as an employee, you may claim a deduction for your artwork up to the value of $300 as part of your home office expenditure.
Art meets function with Sarah Hudson’s Bamboo series.
If you are a small to medium-sized business owner (turning over less than $500 million annually) the amount you can claim is much greater. As the Australian Taxation Office (ATO) classifies artwork as both an investment and a depreciating asset, any artwork purchased for your office (home or other) is eligible for the instant asset write-off measure.
As a depreciating asset, artwork is normally subject to a very low rate of depreciation (around 1% per year). However, as a depreciating asset, art qualifies for the instant asset write-off measure. The threshold for this was raised in 2020 from $30,000 to $150,000, meaning eligible business owners can now claim up to $150,000 per qualified painting or sculpture.
In order to claim a tax deduction on artwork purchased for your office, the artwork has to meet four criteria to be eligible for the instant asset write-off. It must be:
- Tangible;
- Capable of being moved;
- Purchased with the dominant purpose of display in a business premise; and
- Not be trading stock.
The art you choose for your office will say a lot about your business, so think about what kind of message you want to project. Whilst choosing artwork with colours complementary to your brand or organisation is a great place to start, you may also consider subject matter and the overall mood of the painting as well. From Daniel Paul Peterson’s playful abstract exploration of expression, memory and emotion, to the nostalgic Australian coastal landcapaes by Lauren Esplin, every work curated by Bison tells an intricately woven story. To help get you started, we have created an Art for the Office curation.
You should always seek advice from your accountant or financial advisor to consider whether buying and claiming tax deductions on artwork for your office is appropriate for you, your objectives and needs.
Do Fearless, by Daniel Paul Peterson.
