Your situation is shared by many of us working from home. There are pros and cons to each. My biggest distraction is also one of my favorite things about working from home, being near by dogs. I love to just be able to get out and walk with them when the weather is nice, when the mood strikes me, or when I need a break. They can also be a pain in the rear end sometimes, if they bark at clients who are arriving, voice their opinions during conference callls, etc.
For me, the key was setting a regular schedule. Instead of working all hours and trying to juggle home life like laundry, cooking and cleaning between client meetings and such, I started a regular daily schedule. From the time I get up til noon, its home time. I walk the dogs, clean house, do laundry, make my husbands dinner for him to take to work, talk to friends, email, etc. From 12-4 daily, its strictly business. At 4, I take another walk with the dogs, take a break, and decide if I need to work on projects more. My job is only part time, and this is a much more effective way to deal with the distractions. It took a few weeks to "train" the people in my life to my new schedule, but the dogs readily adjusted. My house is cleaner and my life is more enjoyable all around.
Being tax time, it reinforces the reason I have a home office. Much better way for me to run my business. I have an offer to go into a professional building for very low rent, but it would increase my costs, (travel, internet, phone) and I cannot see how it would increase my income. As a small business consultant, I meet with clients in their offices most of the time anyway.
Your site is very nice, and your work is top notch. Is the new space in a location that will garner more business for you? Can you be as creative there as you are at home? If you can offset the costs and make more money, it can be a very sound decision. There is a point where getting out of the house is the logical next step. Be sure you have the additional income to not only justify the added expense, but to build your business.