Home office: deduct expenses or rent to your company?
Many managers use part of their home as a workspace. They have two options: rent out this area to their company, or include the corresponding costs in their business expenses. Each has a different tax impact.
1. Renting to your company
When you rent a room in your home to your company, the rent is in principle considered as real estate income. It is taxed at progressive rates, after application of a flat-rate allowance of 40%.
However, if the rent exceeds a certain ceiling (the “requalification threshold”), the excess portion is requalified as remuneration, with much less favorable tax and social treatment. In practice, this ceiling is often limited, since it is calculated on the basis of the cadastral income of the rented space.
When furniture is rented in addition to the premises, the corresponding portion is taxed separately as income from movable property, after a flat-rate deduction of 50%.
2. Deducting actual business expenses
Instead of charging rent, some executives choose to deduct the actual costs of their home office from their remuneration. This is only possible if the expenses are directly related to their personal management activities (administration, management, planning, etc.) and not to the company’s operational activities.
Case law regularly confirms this approach: when a manager actually uses part of his home for the day-to-day running of his business, the deduction may be allowed. In some cases, this can result in deductions well in excess of the flat rate for business expenses (€3,130 maximum in 2025).
3. Which choice is more advantageous?
Deducting actual expenses can offer greater tax benefits than renting, but only if:
– the expenses are sufficiently high,
– the use of the office is clearly linked to management duties,
– and the manager is prepared to document this use precisely.
The higher the financial stakes, the more closely the tax authorities will examine the case.
Conclusion
The best option depends on your situation: surface area used, amount of expenses, nature of your tasks and structure of your remuneration. A personalized analysis is essential to optimize the tax treatment of your home office.