Home Office Setup Costs: Can You Deduct Furniture and Equipment Installation?

When you set up a home office, you'll likely buy a desk, chair, shelving, and lighting. Some of these costs can be claimed on your 2026 tax return, but the CRA treats them differently depending on whether they're supplies, equipment, or capital assets. As a general rule, items that cost under $500 and wear out within a year (like office supplies) are fully deductible, while permanent fixtures and furniture may need to be depreciated using Capital Cost Allowance (CCA) rules. Installation costs usually follow the same treatment as the item being installed. The CRA divides home office costs into three categories: Fully Deductible in Year of Purchase - Office supplies (paper, pens, notebooks, printer ink) - Printer cartridges and toner - Desk accessories under $500 - Small task lamps and USB chargers - Cleaning supplies for your office space - Printer paper and filing supplies May Be Subject to CCA (Depreciated Over Time) - Office furniture (desks, chairs, filing cabinets) over $500 - Computer equipment (monitors, keyboards, mice) - Shelving units and storage systems - Office lighting fixtures (if permanently mounted) - Artwork and decorative items over $500 Not Deductible - Personal furniture that happens to be in your home

Frequently Asked Questions

Can I deduct the installation cost of my home office furniture?

Yes, installation costs are added to the cost of the item itself. If the item plus installation totals under $500, you can deduct it fully in that year. If the total is $500 or more, both the item and installation are depreciated using CCA rules.

What's the difference between office supplies and office equipment?

Office supplies (paper, ink, pens) are consumed within a year and are fully deductible in the year purchased. Office equipment (desks, chairs, monitors) lasts longer and items over $500 must be depreciated over time using CCA.

Do I need to depreciate my $450 office chair?

No. Since it's under the $500 threshold, you can deduct the full $450 in the year you bought it. However, if you paid $50 for delivery and installation, making the total $500, then it becomes subject to CCA depreciation.

Can I claim furniture I already owned before setting up my home office?

No. The CRA only allows deductions for expenses incurred for business purposes. Personal furniture moved into your home office doesn't qualify as a new business expense, though brand-new furniture purchased specifically for the office does.

What CCA rate applies to office furniture?

Most office furniture falls under Class 8, which has a 20% declining-balance depreciation rate. Computer equipment is Class 45 with a faster 45% rate. You claim a percentage of the remaining balance in the CCA pool each year.

Steps

Gather all home office furniture and equipment receipts: Collect invoices for every purchase from the past year, including delivery and installation fees. Organize them by item type and total cost so you can determine which ones fall under or over the $500 threshold.
Separate items into supply and equipment categories: Group office supplies (under $500, consumed within a year) separately from furniture and equipment (lasting longer, may exceed $500). This determines whether you claim them immediately or depreciate them over time.
Calculate the cost of items over $500: Add the purchase price, delivery, and installation fees together. For items totaling $500 or more, note the combined amount, as this will be added to your CCA pool instead of claimed in full this year.
Determine your home office space percentage: Measure the square footage of your dedicated office area and divide it by your total home square footage. If your office is shared with other activities, apply this percentage to furniture costs that serve the entire household.
Use the Home Office Deduction Calculator to model your claims: Enter your supply costs, equipment costs, and space percentage into the [Home Office Deduction Calculator](/tools/home-office-calculator) to estimate your total deduction for 2026.
Report supplies on your tax return under business expenses: On your T1 General (Schedule 8 for self-employed), report all fully deductible office supplies under the office expenses or supplies line, not under capital cost allowance.
Record CCA items in your CCA pool on Schedule 8: Report furniture and equipment over $500 in the appropriate CCA class on your tax return. You'll claim a depreciation percentage each year rather than the full cost in year one.