Buyer Value Option: The $320,000 Blind Spot Hiding in Your Relocation Budget

Reduce Relocation Costs Without Reducing Benefits

• Eliminate the employee tax exposure on home sales
• Eliminate the company tax gross-up costs
• Fully IRS-compliant under Revenue Ruling 2005-74

An employee accepts a transfer and sells their home. The company reimburses the commission and closing costs as outlined in the relocation policy because those reimbursements are generally considered taxable income. Employers often provide an additional gross-up payment to offset the tax impact, adding thousands of dollars in unplanned costs per relocation for both the employer and the employee.

This scenario plays out at companies of every size, and it is almost entirely avoidable. There is a structured, IRS-compliant strategy that removes the tax exposure altogether, known throughout the industry as the Buyer Value Option, or BVO.

What is Buyer Value Option?

A Buyer Value Option is a tax-protected home sale program. Instead of reimbursing an employee directly for real estate commissions and closing costs, which would create taxable income under IRS rules, a relocation management company (RMC) purchases the employee’s home and resells it to the outside buyer already under contract. Because the employee never receives direct reimbursement, no taxable income is created, and no gross-up is required.

The structure must follow IRS Revenue Ruling 2005-74, which defines how a tax-protected home sale program must be structured to withstand IRS scrutiny.

One change. Two savings. The employee avoids unexpected tax liability, and the company avoids unnecessary gross-up expense.

What About a Guaranteed Buyout?

The Guaranteed Buyout (GBO) is an alternative tax-protected home sale program designed for companies that need to move employees on a faster timeline. Under a GBO, an initial marketing period of 60 to 90 days is established. If no outside buyer is secured during that window, the RMC purchases the home at a price determined by the average of independent appraisals. The GBO carries somewhat more risk than a BVO but delivers the same tax savings while getting your employee to their new location faster. Signature Relocation manages both programs and will recommend the right structure based on your policy, risk tolerance, and workforce profile.

The Tax Cuts and Jobs Act of 2017 eliminated several tax protections for relocation benefits, but tax-protected home sale programs like BVO were not affected by that change. They have remained intact through every round of tax reform since, including the One Big Beautiful Bill Act signed into law in July 2025, which made most individual tax provisions permanent rather than letting them expire as scheduled at the end of that year. The case for BVO has not changed: it remains a stable, compliant, and measurable way to control relocation costs.

Especially Valuable for Executive Relocation

BVO carries even more weight in executive relocation packages, where home values and the stakes of a smooth relocation are both higher. By removing the administrative burden and tax implications associated with a home sale, executives can focus on their new responsibilities rather than managing a real estate transaction.

Why Companies Partner with Signature Relocation

Relocation is built on trust. While technology plays an important role, the strongest mobility programs are built on relationships. At Signature Relocation, we believe in meeting face-to-face whenever possible, maintaining open communication, and serving as a true extension of our clients’ HR teams. Our clients know who to call, who is supporting their employees, and who is accountable for the success of their program. Combined with custom client microsites and leading Equus technology, this approach creates a relocation experience centered on responsiveness, visibility, and personal attention.

FREQUENTLY ASKED QUESTIONS

WHAT IS BUYER VALUE OPTION(BVO)?

A Buyer Value Option (BVO) is a home sale program that helps employers reduce relocation costs by structuring the home sale in accordance with IRS Revenue Ruling 2005 74. When implemented correctly, a BVO can minimize unnecessary tax liability while supporting relocating employees.

HOW MUCH CAN BUYER VALUE OPTION SAVE AN EMPLOYER?

Savings vary based on home values and relocation volume, but employers can often reduce gross-up expenses and avoid unnecessary relocation costs. Organizations managing multiple homeowner relocations each year may realize significant annual savings.

WHAT IS THE DIFFERENCE BETWEEN A BUYER VALUE OPTION AND A GUARANTEED BUYOUT?

A Buyer Value Option is typically used after an employee secures a qualified outside buyer for their home. A Guaranteed Buyout provides employees with a guaranteed purchase offer if the home does not sell, offering additional security in certain relocation situations.

IS BUYER VALUE OPTION IRS COMPLIANT?

Yes. When administered correctly, a Buyer Value Option follows the requirements outlined in IRS Revenue Ruling 2005 74, helping employers reduce tax exposure while maintaining compliance.

HOW DO I KNOW IF BUYER VALUE OPTION IS RIGHT FOR MY RELOCATION PROGRAM?

The right solution depends on your relocation policy, employee population, and business objectives. An experienced relocation management company can evaluate your program and recommend the most effective home sale strategy.

About Signature Relocation

For more than 28 years, Signature Relocation has helped organizations simplify employee relocation through customized domestic and global relocation programs designed to reduce administrative burden, control costs, and create a better experience for relocating employees.

As an independent, family-owned relocation management company, we provide 24/7 direct access to leadership, dedicated support teams, and experienced professionals who know your program, policies, and priorities. When you contact Signature Relocation, you reach someone who knows your organization, not a call queue.

Whether you need Buyer Value Option services, Guaranteed Buyouts, policy consulting, destination services, temporary housing, or complete relocation program management, Signature Relocation delivers customized solutions backed by responsive service and industry expertise.