Spend what fits the deal and your budget. Common rules of thumb are 1% to 5% of your commission or $50 to $300 a closing, and both are industry convention, not survey data. Whatever you spend, the IRS business gift deduction is $25 per recipient per year, and one gift to a couple is generally treated as one gift. Give the gift after closing with no strings, and never tie it to a review.
What agents usually spend
You’ll hear two rules of thumb: 1% to 5% of your commission, or $50 to $300. Neither comes from a survey. They are habits passed from agent to agent. No rule says you must give a gift at all, and a handwritten note costs nothing.
Set a number you can repeat on every closing. A gift you can afford twelve times a year is better than a big one you regret in a slow month.
What you can deduct
IRS Publication 463 limits the business gift deduction to $25 per recipient per year. Three details matter:
- Per recipient, per year: two gifts to the same client in one year share one $25 limit.
- Couples usually count once: the IRS generally treats a gift to a client’s spouse as a gift to the client, so one gift to a couple gets one $25 limit. If both spouses are separately your clients, ask your tax adviser.
- Incidental costs are separate: engraving, wrapping and shipping are not counted toward the $25 if they add no substantial value to the gift.
A worked example. You give a $150 gift. You can deduct $25. The other $125 is not deductible. If you close 12 sales in a year with 12 different clients and give each a $150 gift, you spend $1,800 and can deduct $300. The other $1,500 is not deductible.
The limit doesn’t stop you from spending more. It means most of a larger gift won’t reduce your taxable income. This guide covers gifts only. Ask your tax adviser how to treat anything else you spend on clients, such as meals or event tickets.
Try it: Closing gift budgetSet a gift budget from the commission and see the $25 deduction limit.Gift ideas by budget
Good gifts are useful, personal or local. A gift covered in your logo is an ad, and clients can tell. Skip alcohol unless you know the client would enjoy it.
Under $50
- A gift card to a hardware store or a restaurant near the new home.
- A doormat or a houseplant.
- A handwritten note with your list of local tradespeople and utility contacts.
$50 to $150
- A basic tool kit for a first-time owner.
- A basket of food from local makers.
- A framed photo of the home taken on closing day.
$150 to $300
- A locksmith visit to rekey the doors.
- A house cleaning before move-in.
- A drawing of the home by a local artist.
Prices vary by area, so check what each idea costs where you work.
When to give it, and what comes next
Closing day is the obvious moment, but it’s crowded. The client is signing papers, moving money and thinking about the moving truck. A gift that arrives a week after move-in gets more attention, and it gives you a reason to ask how the house is treating them. Either works. Pick one and do it every time.
The gift is the start of your follow-up, not the end. Check in after the first month, then write once a year on the anniversary of the purchase with a note on how local prices have moved.
Try it: Home anniversary letterWrite a letter to a past client on the anniversary of their purchase, with how local prices have moved.Rules to know
- A thank-you after closing vs. a promise up front: a gift to your own client after closing is a thank-you. Something you promise in advance to win the business (“hire me and get a free TV”) is an inducement. State inducement and rebate rules vary, and some states restrict them. NAR’s Code of Ethics (Standard of Practice 12-3) also calls for clear terms on any inducement. Check your state’s rules and your broker’s policy before you advertise any offer.
- Gifts tied to settlement referrals: RESPA Section 8 bars giving or accepting a thing of value for referring settlement service business, such as mortgage, title, insurance or inspections. That covers gifts between you and a lender or title company when they are tied to referrals. See co-marketing with lenders: what RESPA allows.
- Gifts and reviews: don’t offer or hint at a gift in exchange for a review. As of October 2026, Google’s review policy allows no incentives of any kind, including gifts. The FTC’s rule on fake reviews and testimonials, effective October 21, 2024, bans buying reviews conditioned on a positive or negative sentiment. Give the gift freely and ask for the review on its own, using the review request generator.
This is general information, not tax or legal advice. Ask a tax adviser about deductions and your broker or an attorney about your state’s rules.
For more on reviews, read Google Business Profile for real estate agents. For more ways to stay in touch with past clients, see real estate email newsletters that get opened.
Common questions
Are closing gifts tax deductible for real estate agents?
Only in part. The IRS business gift deduction is $25 per recipient per year (IRS Publication 463), and one gift to a couple is generally treated as one gift. Ask your tax adviser.
How much should a real estate agent spend on a closing gift?
Common rules of thumb are 1% to 5% of your commission or $50 to $300, but those are industry convention, not survey data. Pick an amount you can repeat on every closing.
Can I give a client a gift in exchange for a Google review?
No. Google’s review policy bars incentives of any kind, including gifts, so give the gift with no strings and ask for the review separately.
Updated October 2026. General information for real estate professionals, not legal, tax or financial advice. Prices, platform rules and program terms change, so confirm them at the source.