Brokerage desk fees and business-use-of-home costs are different expenses. A self-employed agent may be able to deduct both when each was incurred to earn business income and the claim does not count the same cost twice. Eligibility depends on what the brokerage fee covers and whether the home workspace meets the CRA tests.
Start with the brokerage statement
Ask the brokerage for an annual statement and a description of each fee. A fee for office access may be an office-rent expense. Other amounts may instead relate to administration, technology, marketing, insurance, or commission splits. Classify the actual service rather than putting the whole statement under one label.
The principal place of business test
To claim home office expenses, your home must be either:
- Your principal place of business, meaning it’s where your business is mainly run from (a facts test, not a fixed percentage), OR
- Used exclusively to earn business income AND used on a regular and continuous basis for meeting clients
For an agent who works in several locations, the principal-place test requires a factual assessment of where the business is actually carried on. Keep a reasonable record of work time and use of the space.
An exclusive room is not always required. If the space also has a personal use, allocate the costs by both area and time. The temporary $2 per day method applied to eligible employees for the 2020 to 2022 tax years. It was not a self-employed business-use-of-home method.
Records for each option
For brokerage fees:
- Monthly invoice or annual statement from your brokerage showing desk/office fees paid
For a home workspace:
- Total home square footage and office square footage (measure it)
- 12 months of rent receipts or mortgage statement showing interest paid
- Utility bills (electricity, heat, water)
- Internet bills
- Home insurance annual premium
- Maintenance and minor repair receipts
- If you own: property tax bill
Keep all of these for 6 years in case of a CRA review.
Avoid double counting
Do not include a brokerage fee in two expense categories, and do not treat a brokerage office cost as part of your home expenses. If a bundled brokerage charge covers several services, use the statement or ask the brokerage for a breakdown. An accountant can help when the allocation is unclear.
How Accountly helps
Accountly can store the brokerage invoices and home expense records, then organize the transactions for review. You remain responsible for the eligibility and business-use allocation entered on the return.
For the full picture of agent tax filing, see our Tax Season Guide for Real Estate Agents and general home office deductions guide.
FAQ
Can I claim desk fees and a home office in the same year? Potentially. They must be separate costs incurred to earn business income, the home workspace must qualify, and no amount can be counted twice. Review bundled brokerage fees carefully.
What if I stopped paying desk fees mid-year and started working from home? Claim only the eligible costs actually incurred in each period. Overlap is not automatically disallowed, but the records must support each expense and avoid duplication.
Does my brokerage T2200 form affect this choice? A T2200 applies to employees. A self-employed agent claiming business-use-of-home expenses on Form T2125 does not use it. If the brokerage treats you as an employee, review the employee workspace rules instead of this self-employed guide.
Can I deduct mortgage principal as a home office expense? No. Only mortgage interest is deductible as a home office expense, not principal payments. The interest amount is on your annual mortgage statement.
What percentage of my home can I claim? Use a reasonable basis, commonly the workspace area divided by the home’s finished area. If the space also has personal use, apply a time-use factor as well. Keep the measurements and calculation.
Is it worth switching methods year to year? Recalculate the claim from the facts and costs for that year. This is not a choice between two prescribed methods for self-employed agents.
Official CRA references
Check the CRA’s Form T2125 and business expense guidance against your tax year and circumstances.
The information in this guide is for general informational purposes only and is not intended as accounting, tax, business, or legal advice. Accountly does not provide professional services or act as your accountant, tax advisor, or lawyer. No client relationship is created by your use of this material. Always seek advice from qualified professionals who understand your particular circumstances before acting on any information contained herein.