Changing Rental Lease to Licence for family member

losttheplot

Registered User
Messages
594
A number of years ago parents had some financial complications with a business venture and ended up living with a family member. They were unable to get a mortgage and the whole situation was getting tense. As a solution, myself and my partner purchased a house and they became our tenants. They own the contents, we own the property, rent was way below market rates (covered mortgage interest), registered with RTB and all declared to revenue.

We cleared the mortgage quickly and parents are now retired with a small pension. I'm considering changing from a tenancy to a licence arrangement. I will no longer charge rent and they have free use of the property. I'm planning to have this agreement drawn up by a solicitor. Is there anything else I need to consider that isn't listed below.

  • Tax: Parents will receive free use of a property, value of this will be about €6k (annual rent). So I think this could be covered by small gift exemption.
  • Will revenue query why I no longer have rental income?
  • Insurance: House is insured as BTL, should this change?
  • All utility bills are in the parents name, don't intend changing that.
  • For the licence agreement, I'll talk to solicitor but basically want to allow them to live their for life, with the assurance that if anything happens me and they fall out with my partner, they're still covered. The licence will only apply to my parents. Is there a danger where a niece/nephew or new partner moves in and tries to claim some sort of rights?
  • Should there be something specific in the agreement if they move to a nursing home that the licence ends?
 
I know a couple of people with that sort of arrangement and it was never an issue where they had to have leases etc or deal with revenue.

And if it there was a problem with revenue just say
Your parents live there in return for minding and maintaining the house for you. No money changes hands.
 
Back
Top