Homestaging
Fenomenet & avdragsrätten
Around year 2004, a new service was introduced on the Swedish housing market with the purpose of increasing the sell price, namely homestaging. Homestaging means that a home gets in order before a open house, for example by removing personal affections or the leasing of new furniture. The phenomenon originates from the United States, where it has existed for several decades.Most components, but not all, that is included in the homestaging concept is tax-deductible and this has lead to several questions around the law and foremost within tax law. To elucidate this complexity of problems around the right to deduction for homestaging, the Swedish tax agency, Skatteverket, has formulated a letter stating the authority?s attitude towards the phenomenon. The letter functions as a recommendation but is not comparable with law.The operators within the real estate sector that is most likely to come in contact with the concept is homestagers and real-estate agents. How extensive is these operators? knowledge within the right to deduction and the complex of problem around this? On these premises, a telephone survey has been carried out to find out which knowledge 20 real-estate agents and 25 homestagers posseses within the right to deduction and which information they give to their customers. To check which information is given via the homestagers webpages, 50 homepages has also been analyzed. Moreover, a representative from the Swedish tax agency has been interviewed to create deeper understanding regarding the authority?s attitude.In addition to these interviews, a survey has been done with the aim to find what tax-law-legislated demarcations considered compitable to what applies for homestaging and the right to deduction.The survey of the webpages shows that the homestagers with a webpage linking/referring to Skatteverkets letter is the homestagers that is most knowledgeable within the tax law and the right to deduction. The interviews with the real-estate brokers and homestagers show existence of significant knowledge gap in both groups concerning the right of deduction. The deficiency is more alarming in the real-estate agent group, because of their legal advisory role.The different components within the concept of homestaging are related to the following cost areas; sale costs, improvement costs or personal living expenses. Costs that are related to sale costs are tax-deductible without reservations, costs that are related to improvement costs is considered as tax-deductible if they meet certain criteria and costs that are related to personal living expenses are never tax-deductible. Sometimes, the boundaries are somewhat indistinct and the nature of the costs becomes a matter of interpretation.The letter from Skatteverket, the right to deduction, the media attention, requests from homestagers and real-estate brokers and the possibility to get a higher sale price for a real estate, concludes that homestaging is not a temporary fad but is here to stay.