Are Home Staging Costs Tax Deductible?

Home staging is a critical part of the home-selling process. It helps potential buyers connect with the home and its success increases the chances of a quick purchase. However, despite its importance, home staging costs may affect a seller's bottom line, leading to the question of whether home staging is tax deductible.

Are Home Staging Costs Tax Deductible?

Yes, home staging costs in Australia may be tax-deductible if the property is an investment or rental, and the expenses are related to generating income. However, they are generally not deductible for personal residences.

If your property is an investment, the costs of home staging could potentially qualify as a tax deduction, helping to offset any potential capital gains tax obligations.

Can You Claim Home Staging Costs When Selling A House?

As a marketing activity, home staging costs are allowable expenses when calculating capital gains tax on an investment property. However, if after staging the house is delisted from the market, the staging costs are not tax deductible. They will be considered as renovations which are not allowable tax expenses. When calculating your capital gains tax due, the amount on the invoice from a staging company involved in the sale process is the amount deducted as part of marketing or advertising costs.

Benefits Of Staging Your Home In The Sales Process

Gets The House Of The Market Fast

The purpose of home staging is to show potential buyers that the property they are in is ideal for their needs. Furniture is placed aesthetically and strategically to ensure the home provides an image of the potential client’s goal.

There have been many success stories about properties that had been in the market for a prolonged period until the sellers hired an expert home stager. It resulted in the seller receiving multiple offers and the sale of the house in less than a month.

Helps To Raise The Asking Price 

A properly staged house will sell for more than an unstaged home. Staging makes the house more attractive in the eyes of the buyer, allowing them to agree to pay a premium for the property. Therefore, a home seller can recoup the cost of home staging on two fronts; as a tax-deductible, and from the profit earned after selling the property at a higher than-market price.

Helps Listing On Property Websites Stand Out

With property sales increasingly starting online, staging makes your house attract more attention while in the listing and increases offers. Posting professionally done photos of a staged house puts it out there in its element. As a result, it generates massive interest from potential buyers, enabling it to sell fast. Further, hiring a house staging professional helps enhance its appearance both online and offline.

Conclusion

If you are wondering how to treat your home staging costs when calculating your tax after selling a property, it is best to consult an expert financial advisor. As an allowable expense, home sellers should consider hiring a professional home stager to maximize its appearance to enable a quick sale and higher profits at the end of the transaction.

Ready to transform your property and maximize its value? Book online today to connect with our home staging experts and create a stunning, market-ready home that buyers will love.