COVID forced an ABC presenter to work from home. He took a two-bedroom lease for the office. Used the second bedroom only for work. Claimed a portion of rent. The Full Federal Court: not deductible. Compelled. Exclusive. Essential. Still domestic.
Commissioner of Taxation v Hall [2026] FCAFC 43.
The facts
Mr Hall was an ABC sports presenter in Melbourne in the 2021 income year. His Digital Role (75%) was performed exclusively from a second bedroom of a rented two-bedroom apartment, taken specifically for the home office. His Live Role (25%) was at the ABC Southbank Studios. Victorian COVID directives and employer requirements meant he had no choice on the Digital Role [1]-[2].
He claimed a portion of rent plus car expenses for the studio drive. The Tribunal allowed both. The Commissioner appealed.
Essential character, not use
Section 8-1 has two cumulative limbs: positive (outgoing in producing income) and negative (not private or domestic). The positive limb does not answer the negative: John [1989] HCA 5 at 431. The Tribunal collapsed them, an error of law [58], [72].
The character of an outgoing for accommodation is fixed by what it secures, not how the space is used: Faichney [1972] HCA 67 at 43, Handley [1981] HCA 16 at 194, Forsyth [1981] HCA 15 at 216-217. Rent secures the home; exclusive work use does not strip the domestic character [74].
Compulsion does not change that. Being obliged to incur expenditure does not convert private into deductible: Cooper [1991] FCA 190 at 201, applied at [61].
The Full Court doubted Brixius [1987] FCA 612 and Case 70: their reasoning is “not easily reconciled” with Faichney, Handley and Forsyth [68].
On car expenses, the Digital and Live Roles were “quite distinct” activities. The drive was travel “to” income-producing activity, not “in” performing it [95]-[96].
The practitioner takeaway
First, occupancy expenses (rent, mortgage interest, rates, insurance) are not deductible for employee home offices. Brixius will not save you. Nor compulsion. Nor exclusive use.
Second, running expenses (electricity, heating, internet, phone, depreciation) are still deductible. PCG 2023/1 fixed rate: 67c/hr before 1 July 2024, 70c/hr from 1 July 2024.
Third, sole traders running a business from home may still claim occupancy if the area has the character of “business premises”: Faichney at 44. Each case turns on its facts.
Fourth, working from home does not convert a commute into deductible travel: s 25-100(3) excludes travel to or from a place of residence.
The ATO’s Interim Decision Impact Statement (29 April 2026) confirms it will administer the law in line with Hall.
General information only. This note was accurate when written. The law may have changed since and the note is not updated. It is not legal or tax advice, does not take account of your circumstances and must not be relied upon as a substitute for advice on your own matter. If the issue is live for you or your client, email arda@nortonquaytaxlaw.com.au for advice on the current position.