Styling tax deductible?

Discussion in 'Accounting & Tax' started by smator, 11th May, 2017.

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  1. smator

    smator Well-Known Member

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    If you're selling a house and purchase furniture to style it instead of engaging a styling company, would the furniture be deductible? Or is it a capital item and depreciable for the time that your staging the house? Or nothing?
     
    smator, 11th May, 2017
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  2. Propertunity

    Propertunity Well-Known Member

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    Are you selling the furniture with the house? or selling the furniture as second-hand goods once the property is sold in a few weeks or months? or keeping the furniture in storage to be used for this purpose over & over?
     
    Propertunity, 11th May, 2017
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  3. Rob G

    Rob G Well-Known Member

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    Maybe better to simply hire and include fees in the cost base of the property.

    If you buy, they are CGT assets and not held for personal use if to sell your IP. So you can make a capital loss on selling. But likely a worse loss than the short term hire cost. Also you have to stump up full cost if you want to buy and only get to include in cost base when you sell the furniture.

    If you do buy, they are depreciating assets. However, you may not claim depreciation deductions as the holder because they are held solely to generate a capital gain, s.51AAA ITAA36.

    Run the numbers and see which capital cost/loss is better for your circumstances.

    Interesting question, by the way.
     
    Last edited: 11th May, 2017
    Rob G, 11th May, 2017
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  4. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    I dont think styling costs need to be looked at as a tax issue as its just not deductible as Rob says. Its a profit (CGT) issue. Hopefully the cost reflects as a higher sales value.

    If the property is tax exempt (ie own home) then you benefit 100% from that higher value. If its a vacant former rental and subject to CGT you may benefit 50%. Rather than this being a tax question its really one for a REA to advise of the potential for a value enhancement v's not spending the $...A decision with a payback and likely diminishing returns.

    eg styling a demo-ready deceased residence property wont get a cent more.
     
    Paul@PAS, 11th May, 2017
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  5. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    What do these styling packages cost roughly - to hire?
     
    Terry_w, 11th May, 2017
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  6. Propertunity

    Propertunity Well-Known Member

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    Commonly $5-6K for an auction campaign of 4-6 weeks.
     
    Propertunity, 11th May, 2017
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  7. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Affected by whats rented. Can be light or really a whole house.. Art even
    And how longs its needed.

    I saw a location location location where it was a fair amount for 6 weeks and filled big truck... $6K.

    You can also do the westie landscape reno. Leave plants all in the pots and pull them up when it sells and take them
     
    Paul@PAS, 11th May, 2017
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  8. smator

    smator Well-Known Member

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    Was thinking of either reselling once sold or storing and using for this purpose again
     
    smator, 12th May, 2017
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  9. Ross Forrester

    Ross Forrester Well-Known Member

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    For 6k we style our own houses. Basically we scrounge furniture around the extended family and everybody deals with it while the house sells.

    We will buy a few pieces and then redistribute them back to everybody.

    We all have nice stuff and you can mix and match.
     
    Ross Forrester, 12th May, 2017
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  10. wylie

    wylie Moderator Staff Member

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    We had a four bedroom house furnished, looks great (and the furniture is much nicer than many of the "same old" looks you see everywhere) for $3.6k for six weeks. Further hire is half that price for the next block of time.

    In the past, we've done as Ross does, and pulled furniture from our own house and my parents' house, bought cheap beds (but dressed them up with lovely bedding, pillows etc) and then kept the things we want, and sold the rest. But I'm no longer prepared to live without our own furniture for six weeks or have to pay to have it moved to and from the house and risk the damage to our own things.

    Our own dressing has looked amazing, but I'm not prepared to do all that work when someone else does it all for $3.6k with no risk to our things.
     
    wylie, 12th May, 2017
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  11. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    I know its hard to judge but what may you estimate to be the benefits :
    1. Faster sale ?
    2. How much better price v's vacant ?

    Im sure others would want to assess merits too
     
    Paul@PAS, 12th May, 2017
    #11
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