Can my parents claim the rent they are paying for sheltered housing against the rent from their home

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bobthebuilder1

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My elderly parents are planning to move into a charity based sheltered housing scheme soon and are hoping to rent out their own house to put towards the rent the scheme charges.

Can they offset one against the other for tax?

Are there any other tax considerations with the move? e.g. does their own home cease being their principal private residence, so would CGT be payable if they eventually decided to sell it?

Any implications for inheritance down the road?

Thanks in advance
 
Hi,
Similar situation, we left the property vacant. One reason was , besides tax on rental, to watch out for the weekly allowance for OAPs to receive medical card entitlement. That was a massive concern for us.

I don't think you can offset income against rent paid, and I think from a nursing home or sheltered accommodation point of view your PPR remains as is ( if left vacant).

Others in this forum may know more.
 
They are solving and paying for their own old age care needs, without asking for any government help like the fair deal scheme etc, while at the same time freeing up a 3 bedroom house for another family.

But they are still expected to pay a load of tax which they will need to make up for out of their savings.

It seems so unfair that that the state will be profiting on the arrangement instead of supporting it.
 
You probably need to talk to a tax consultant.

You can only have one PPR.

The world of the Landlord means you pay tax (as well as the other headaches!)
 
As others have said here is a couple taking the iniative and sourcing a solution which is zero cost to the state but they are actively punished in a financial sense for their efforts. As Brendan indicated its a reflection of where we are at !!
 
Hi Bob

My response was to Fidel's post not yours.

I have argued in the past that reluctant landlords who themselves pay rent should be allowed to set one against the other.

Fidel's parents get such benefits from the state that they are better off leaving a house empty rather than risk losing those benefits.

A person's house should be treated as means and they should get no state benefits if they own a house and so can afford to pay for their own care.

Brendan
 
Hello,

If they leave their house and rent it- they become landlord. The income is taxable albeit there is a high exemption level of income for the elderly.

If they are in receipt of non contributory pension the rental income could affect their entitlement as it is means tested and reduce it. Same goes for medical card entitlements..

If one parent is on a contributory pension and the other a dependant on that pension., that aspect is means tested and could reduce their entitlement.

If they continue to rent after they move out the Ppr relief will be partially reduced.. but in saying that if they pass away there is no cgt on death ...

If they sell now .. provided it was their home all the time they could use the cash to fund the new sheltered housing cost. In this situation provided all criteria satisfied no cgt due. However the cash could impact pension entitlement as outlined above.
 
Brendan Burgess said:
Hi Bob

My response was to Fidel's post not yours.

I have argued in the past that reluctant landlords who themselves pay rent should be allowed to set one against the other.

Fidel's parents get such benefits from the state that they are better off leaving a house empty rather than risk losing those benefits.

A person's house should be treated as means and they should get no state benefits if they own a house and so can afford to pay for their own care.

Brendan
Click to expand...

Hi Brendan,
The situation was more complicated. My father scrimped and saved all his life so that he could be looked after when he got old. He moved into sheltered accommodation aged 84, two years ago.
Prior to this he lived independently as a carer for my late mother, but worked extensively in the US, England and all around the country until he retired.
I remember in 2007 when she had a stroke - previously she had heart operations in 1962 & 1993, the HSE called and told him he could receive 30 mins assistance entitlement a week for home help. Then they wrote back to say there was no funding for this.
Anyway as a result of keeping his health insurance and saving every week, the house fell into disrepair. A bill of c 40k to 50k was estimated from survey...beyond his means to repair to make suitable for rent. We also offered it last year to the council, for letting, and they turned us down.
So its vacant now. The 80% of income from rent is used for fair deal assistance.
Its not clear to me if:
You have to pay tax on this, or just the 20% remainder.

Or does the "income" count against medical limits for OAPs ...? h
He gets c 500euro a week from his pensions and superannuations from here, England and the US. Some of this is income is from making additional National Insurance contributions to HMRC in the 70s when Britain was in IMF and you get bonuses OAP levels from additional contributions.
We have applied for fair deal as he juust moved in to a nursing home due to illness. Meanwhile he pays c.4900 per month, until hopefully the forms is processed.

The lesson learnt is he should have enjoyed life more. He should have spent money on fancy new cars, foreign holidays, gifts to grandkids, done up the house nd indulged himself like others do. Meanwhile he did save and act responsibly, to no cost to you or others, pay mortgages at 18% in 80s and live abroad, and his reward is a begrudging system of care for an 86year old, who until 2 years ago cost the system 0.

I hope others can look at themselves before passing judgement about "state benefits"
F.
 
fidel

So he worked abroad a lot of the time but is now benefiting from an Irish pension and medical care?

He now wants me to pay for his nursing home as well?

First of all, a person's pension should be based on what they put into the fund.

I am very happy to pay for someone's nursing home care if they can't afford it. But I should not be forced to pay for it when he clearly can afford it.

He should sell the house to pay for the nursing home.

And, as I have said previously, if he rents out his house, he should be allowed to set the rent paid against the rent received in calculating the tax.

Brendan
 
Brendan,
Firstly he worked from 1949 to retirement, theres no issue with contributory levels . In the 70s to 80s like thousands of others he worked abroad, rather joining the dole.

We stayed here, and I can assure you it was no walk in the park to be Irish in England in the 70s. Perhaps he could have stayed signed on and claimed "stamps".

I agree, his modest assets and weekly means should and are being be used, the savings will last two years or thereabouts.
The house would need to be demolished or the funds found , its not on Dublin so very modest.

However if he had spent more on himself and others, there would be less available for HSE to account for. In other words being prudent comes at a cost.

Yes he wants you to pay for additional services for the elderly. Like you pay for schools, roads, hospitals, libraries. We should all pay our fair share, some pay bugger all and the same people foot the bill.

Like he paid for your education, when you were young, your libraries, roads, parks, teachers, dare I say it universities, when he worked. Your not the first my friend.

Someday the clock will tick forward and it'll be your turn, like it is for all of us.
F.
 
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