Are the cost for hiring a Home Staging Professional a Tax Deductible?

TL;DR
Home Staging: A Legitimate Expense That Can Be a Tax Deduction
"Professional home staging in Las Vegas not only enhances property appeal and sale speed but also offers significant financial benefits. Recognized by the IRS as a tax-deductible advertising expense, staging is a strategic investment that boosts proceeds and reduces taxable profit for home sellers."

Experienced home sellers and Real Estate Agents recognize the importance of professional home staging to attract offers and maximize the selling price of their properties within a shorter time frame. Recent data consistently reaffirms that staged homes tend to sell faster and for higher prices compared to similar homes on the market. This shifter sale process ultimately saves homeowners money in the long run, often offsetting the staging costs through increased sale proceeds.

As an Experience Staging Professional at Stageasily LLC, I'd like to highlight the aspects related to the cost of staging: it may be tax deductible. Several articles from tax professionals state that the IRS regards staging services as advertising expenses because they prepare your home for potential buyers. This classification allows homeowners to deduct staging fees from the proceeds of the home sale, reducing the overall taxable profit. In essence,

the IRS recognizes staging costs as legitimate selling expenses for both primary and secondary homes, making them eligible for tax deductions.

It's essential to note that if a staged home is removed from the market before it sells, staging expenses are not tax deductible.

When it comes to personal residences, there are typically no tax benefits or deductions for regular repairs and only home improvements increase a property's cost basis.

This cost basis concept extends to the fee paid to professional home stagers who furnish and decorate the home with furniture, artwork, plants, table settings, and decor. The staging fee is considered an expense of the sale and is deducted from the proceeds, effectively reducing the taxable profit.

In summary, the IRS allows deductions specifically for the cost of home staging when it's categorized as an advertising expense. However, this deduction cannot be applied to personal renovations for the homeowner's benefit.

Most realtors we talk to in the Las Vegas area, highlight a commonly overlooked fact:

Staging significantly accelerates the sale of homes, ultimately saving sellers money in the long run.

Often, sellers view the cost of staging, typically ranging from $3,000 to $8,000 for a median home, as an expense they must recoup. However, in reality, staging fosters competition and yields higher returns in a shorter time frame.

From my perspective as a home stager, my top recommendation is to start preparations for selling your home well in advance, before you list your property, even before you start looking for a realtor. Remember with our experience with realtors we are in a unique position to tell you about the realtors mentality and values. An pre-listing consultation or a direct quote can help you avoid costly errors.

The extent of staging required varies from one house to another, a free consultation covers all this and advises you for the best approach.

Time and again, my staging clients express the sentiment,

"We should have staged the home before we listed it."

The cost of staging is typically lower than the initial price reduction that might be necessary without staging.

If you have any uncertainties, keep in mind that the IRS provides a deduction exclusively for home staging costs when they are classified as advertising expenses. This deduction cannot be used for personal home renovations that benefit the homeowner.

It's essential to consult with your personal CPA or Tax Advisor to ensure these details remain accurate and applicable to your specific situation.

ALWAYS consult with your own CPA to understand all tax deductions, tax-related details, and the information mentioned above, as they can provide insights into how your specific circumstances may be impacted. It's essential to remember that tax laws can change over time. For the latest information check IRS Publication 523 at irs.gov.