What’s New to Look Out for When Completing Your Tax Return?

Working from Home Expenses

Good news: the fixed rate for working from home expenses has increased from 67 cents to 70 cents per hour in 2024–2025.

To use this method, you must:

• Be working from home to fulfil your employment duties (not just doing minimal tasks).
• Incur additional running expenses as a result.
• Keep a record of your hours worked.

Expenses you can include:

• Utilities (electricity, gas)
• Phone and internet usage
• Office supplies (printer ink, paper, etc.)

Cents per Kilometre Increase

If you claim work-related car expenses, the cents per kilometre rate has increased from 85 cents to 88 cents per kilometre for the 2024–2025 financial year (up to a maximum of 5,000 kilometres per car).

Alternatively, you can use the logbook method, which involves:

• Tracking your work-related trips for at least 12 continuous weeks
• Keeping receipts and records of vehicle expenses

New EV Home Charging Rate

From 1 July 2024, a new EV home charging rate of 4.2 cents per kilometre applies to plug-in hybrid electric vehicles (PHEVs) (not electric motorcycles or scooters).

You can use this rate if:

• You use your PHEV for income-earning purposes
• You charge it at home (not at commercial stations)
• You keep records of power expenses

Medicare Levy Exemption for Lump Sum Payments in Arrears

Receiving income late? A lump sum payment in arrears (LSPIA) covers income owed to you over previous years, but paid in a later financial year.

From 1 July 2024, if you meet eligibility criteria, your LSPIA may be exempt from the Medicare levy. The ATO will assess your eligibility and apply any relevant LSPIA tax offset.

Foreign Resident Capital Gains Withholding Changes

For real property contracts signed on or after 1 January 2025, the foreign resident capital gains withholding tax has increased from 12.5% to 15%.

Other changes:

• The $750,000 threshold for property value has been removed
• Applies to homes, vacant land, mining rights, and leases

Australian residents must provide a clearance certificate to avoid withholding. If you didn’t provide one and had withholding applied, you can claim the withheld amount in your tax return.

Foreign residents who sell Australian property can claim the withheld amount as a credit when lodging their Australian tax return.

Don’t Miss Out (or Get Caught Out)

It’s essential to stay across both the new benefits and obligations in your tax return—so you don’t miss out on what you’re entitled to, or risk penalties for incorrect or incomplete claims.