Staging Costs are Tax Deductible when Selling A Home

YourMortgageTeamonline.com writes: While your clients should contact their CPA on this topic, this is pretty interesting angle and argument for having a professional stager come in and make your listings shine!  Tax tip to your clients: Home staging fees are deductible expenses.

Tip to realtors: read this entire article to understand how…

In today’s market, real estate professionals will be even more competitive in their approaches to attracting buyers. The home staging business is quickly becoming a popular tool used for making one’s home more appealing.

Part of the real estate professional’s job is to suggest ways to improve the likelihood of quicker turnover of their inventory. A professional home stager provides a service designed to sell a home.

From this perspective, if the client hires the stager directly, then they are performing a service with the specific purpose of selling that home. Therefore, yes, the cost and expenses incurred for hiring this professional would be considered deductible when selling their home and may be netted against any gain on the sale, along with commissions paid to the Realtor and legal fees.

Specifically, home staging would be considered “advertising fees” and would fall under the allowable selling expenses. 

That said, if the home stager recommends the entire interior needs a fresh coat of paint, these selling expenses are not allowable deductions.    Bottom line: Paying for the home stager’s services is deductible, while expenses for repairs, maintenance or permanent redecorating of the house are not.

Realtor insight: Allow your stager to bill the client directly, not you, at closing so they can take advantage of this tax deduction.  The client can arrange for funds to be paid out of proceeds at the closing, so no cash up front is needed for them to pay the stager. You as their realtor, agree to lessen your commission by the amount you would have paid your stager, creating the same end numbers for everyone.

What a great way to differentiate your services from an agent who doesn’t understand how to give this great tax benefit to their clients.