If you use a portion of your home as your principal place of business, you may be able to deduct part of your rent or mortgage, as well as certain other relevant home expenses. In order to claim these business expenses, the part of your home used for business generally must be used exclusively and regularly for business purposes. These purposes can include home office, production/workshop space, storage, etc. For in-home daycare providers, the usage need not be exclusive.
An expense that covers the entire home, such as rent or central heating, is considered an indirect expense. You may only deduct a percentage of these expenses equal to the percentage of the home's area that your business uses. For example, a 150 square foot office in a 1500 square foot home is 10% of the home's total area and would mean 10% of relevant home expenses could be deducted.
An expense that applies only to the business area of the home is called a direct expense. If you heat your basement work studio (and only the studio) with a pellet stove, the cost of the pellets would be fully deductible as a direct expense. If you paint your home office (but not the rest of the house), you can claim the whole expense.