Joint ownership and renting a room

S

sunnysj

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Hi,

I own a house with my sister, which we both used live in as our primary residence. I married and moved out and own another house with my husband. we never sold the first house. My sister continues to live in our shared house with her husband. He pays me some rent to contribute towards my mortgage repayments for this house. Can anyone advise, if this rent is below the threshold for the rent-a-room allowance, does it have to be declared as income to the revenue. And if so, would this income be subject to income tax? Does this house now count as a second property for me, and should I be paying the second home property charge.

Any advice would be much appreciated.

Thanks.
 
Rent a room is based on the proviso that you actually live in the house as well. On a strict reading of the law you should be declaring the income and paying NPPR I would have thought. What should happen is that your brother-in-law gives money to your sister who then gives you money on a monthly basis, this should keep you within gift tax limits.
 
dereko1969 said:
. What should happen is that your brother-in-law gives money to your sister who then gives you money on a monthly basis, this should keep you within gift tax limits.
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Would this wash in practice. The sister is saying my sister let me live in her house rent free in return for a gift of €3k per annum!
 
It's better not to get involved in any messy schemes like this.

You are a landlord. He is your tenant and he is paying you rent.

You should declare the rent for tax purposes and you can write 75% of the interest you pay on the mortgage against it.

Overall, you should investigate his buying your share of the house from you.

Brendan
 
i've a simular situation
and i totally agreee that it's messy...
but...

i jointly bought a house with a friend and no longer living there

i rang the revenue and was told as one of the owners is living in the house and other rooms are rented, this counts as rent a room scheme

personally.. i do not pay NPPR, and pretty sure i don't have too

also... from the NPPR website - it mentions divorse/separated but...

I'm divorced/separated - am I liable to pay the charge?


.If a person is divorced or separated (judicial separation agreement having been granted) he or she will not be liable to pay the charge where he or she resides in what used to be the family home as his or her principal private residence. Where the other party to the divorce or separation agreement does not reside in the original family home but retains an interest in the ownership of the property on foot of the divorce or separation agreement, the Act provides that this person will not be liable for the charge in respect of that property.
 
Did you get that advice in writing from the revenue ,email or hard copy , I wouldnt rely on advice from a revenue official over the phone .I don't see how you can claim rent a room when your renting a room in a house that's not your PPR. I think you should take Brendan's advice , you may have no liability .. unless there is a clause I'm not aware of re: separation / divorce etc.
 
nek said:
also... from the NPPR website - it mentions divorse/separated but...

I'm divorced/separated - am I liable to pay the charge?


.If a person is divorced or separated (judicial separation agreement having been granted) he or she will not be liable to pay the charge where he or she resides in what used to be the family home as his or her principal private residence. Where the other party to the divorce or separation agreement does not reside in the original family home but retains an interest in the ownership of the property on foot of the divorce or separation agreement, the Act provides that this person will not be liable for the charge in respect of that property.
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This doesn't seem at all relevant to you. You bought with a friend. The above only applies to people who had been married.
 
GDUFFY said:
Did you get that advice in writing from the revenue ,email or hard copy , I wouldnt rely on advice from a revenue official over the phone .I don't see how you can claim rent a room when your renting a room in a house that's not your PPR. I think you should take Brendan's advice , you may have no liability .. unless there is a clause I'm not aware of re: separation / divorce etc.
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apparently conversations from the revenue are recorded! that's what it says when you ring them anyway! and what's it doing handing out advise if you can't use it? regards the NPPR, admittely it's a loose interpritation, but the co-owner is resident - both our families can't live there! i will make a further inquiry - but i really don't think i should have to pay
hopefully i'll have this mess sorted soon anyway

sorry couldn't be more help sunny
 
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"apparently conversations from the revenue are recorded! that's what it says when you ring them anyway! and what's it doing handing out advise if you can't use it?"

Just because a revenue worker inadvertently gives you wrong information ,it doesn't absolve you from your tax liabilities,(if there is a liability) what I'm saying is if it were me I wouldn't rely on that alone, you could end up with a large liability in the future.
 
contacted NPPR directly via email... i do not have to pay NPPR
===
also... with regards revenue... her sister could just pay a larger contribution to the mortgage (the equivalent of the rent) ... i cant see why tax would be payable there!
 
Under what section did you qualify for an exemption? I would be very interested in finding out.
 
this is what they said...
you now know what i know
it took weeks to get this answer,


A property is only liable for the NPPR charge if it is not occupied by the owner.
It does not matter how many people own the property, as long as one of the owners occupies the property as their principal private residence on the liability dates then the property is not liable for the NPPR charge.
 
nek said:
apparently conversations from the revenue are recorded! that's what it says when you ring them anyway!
Click to expand...

That's very naive Nek. You absolutely can not rely on any advice from any government body that is not in writing. Revenue are notorious for giving out the wrong advice.
 
well.. if i find out the hard way i'll keep you posted and have some humble pie!

but i totally disagree with just "accepting you are a landlord"
personally.. i can i no bases to pay tax on this?

the decision to half rent out half the house was based on their advise..
 
Revenue advice on tax is not sacrosanct-they can and do at times get it wrong.

If there are two owners and one person lives there, it is possible that the NPPR is not payable by the other owner, but, you still own a property that is not your NPPR, and the charge is payable by those that own such properties.

However, the rent a room scheme does not apply to you-only the co-owner that lives in the property. If the co-owner is giving you a share of rent - there is a liability to tax on this for you (either income or gift tax).

If I were you, I would be ringing an accountant for advice-not the revenue. They don't advise - they administer, collect and enforce tax law.
 
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