Income from hosting foreign students

[HouseBuyer10]

Hi everyone,

We are thinking of hosting foreign students from different language schools for 2 to 25 weeks on a half-board and/ or full-board basis.

I understood that as long as we earn less than €14,000 per year our income from hosting is tax-exempt under the rent-a-room scheme.
Does that apply to two-week stays as well or only to long stays?

Also, do we have to fill out a return? I've read that that has to be done if we earn more than €5,000 per year. Is that correct?

Thanks a lot.

 

[Leper]

I notice you are "thinking" of hosting foreign students - As 2nd in our household seniority table (Mrs Lep being Be-All&End-All of everything in the Leperhouse) I advise thread carefully. Start small, review situation every week or even every day. Don't take on what you can't handle. Remember hosting foreign students doesn't end with that perky teenager from Firenze (Florence to us Irish) educating us re Renaissance etc. You can have that virile God's Gift to Women from Barcelona too and he's 35 going on 17. A nice little earner can turn into a disastrous How-did-we-arrive-at-this-point too. And we have Mustafa from the Middle East for Christmas/NewYear. Believe me any profit will be well earned and the last thing on your mind will be Must-I-even-think-of-sharing with the Taxman. Do it the right way (Mrs Lep's words) and the whole experience will be daily entertainment and learning, but stray from the rightway and you are heading for disaster. I am speaking from experience from the days on which women gave up work on marriage a time when even our modern day feminists want to forget.

I'm rambling as usual, but you called the tax situation correctly. Oh! Best of Luck.

 

[jim]

To answer the OPs specific question...

Yes you will need to make a tax return next Oct and as far as i know the first €14k earned is tax free.

Its a great idea to do this, a nice earner and a nice way to meet others from elsewhere.

 

[Philip S]

Generally you should be covered under the rent a room scheme. They state short term guest are not included but this is more the Air Bnb type staying for a night/ weekend sort of thing.
As long as the income is under 14k its exempt. If you go over the 14k its all taxable under normal rules. The 14k is gross payment and includes all money received so if you charge extra for meals, cleaning etc its included in the 14k.

 

[MrEarl]

Hello,

My understanding is that host families usually provide meals. If so, then is the cost of this food deductible for tax purposes (once you cross the €14k pa) ?

If it is not, then there's a benefit to renting your room to someone who you do not have to feed, needless to say.

 

[T McGibney]

Is rent a room applicable to a B&B or full board accommodation provision trade?

 

[cremeegg]

Is rent a room applicable to a B&B or full board accommodation provision trade?

Is that tongue in cheek, or have I finally been able to contribute to your education, rather than the other way around.

The relief is not available for short term guests.

[broken link removed]

 

[T McGibney]

Very good point.

I was thinking more of the 25-week stays mentioned by the OP, and akin to the traditional college digs. Everywhere I read on the web, it says that this can exempt under rent-a-room but I fail to see how it can be given that accommodation provision with meals etc is clearly a trade?

 

[MrEarl]

.....given that accommodation provision with meals etc is clearly a trade?

So where does this all start and finish, with regards to the question of what is a trade and what is just renting a room ?

If meals are provided, do you consider it a trade ?
If a room is rented out, with the tenant using the bathroom and kitchen in the house and you clean these facilities, is that then becoming a trade (given it could be argued that part of the money paid to the home owner is for cleaning the bathroom and kitchen) ?

You can no doubt see why I raised the issue of host families providing meals above.

 

[T McGibney]

If meals are provided, do you consider it a trade ?
If a room is rented out, the tenant shares the bathroom and kitchen in the house and you clean these facilities, is that a trade ?

Its impossible to provide definitive answers to such questions, but I'd be somewhat worried that Revenue - given their previous lucrative u-turns on issues like the R&D credit and home office travel expenses - could very easily turn around and suggest that such factors would turn a room rental arrangement into a trade - as provision of meals and cleaning of shared facilities isn't exactly typical of rental arrangements.

 

[MrEarl]

Its impossible to provide definitive answers to such questions, but I'd be somewhat worried that Revenue - given their previous lucrative u-turns on issues like the R&D credit and home office travel expenses - could very easily turn around and suggest that such factors would turn a room rental arrangement into a trade - as provision of meals and cleaning of shared facilities isn't exactly typical of rental arrangements.

And there is the real problem, the Revenue have not been clear enough in defining what does and what does not meet their criteria.

You refer to things like provision of meals and cleaning of shared facilities not being typical of rental arrangements and sure, if we are talking about someone renting a 6,000 sq. ft commercial unit then you are quite likely correct, but if we are talking about someone renting a room in a house it's far more likely to be a typical part of the rental arrangement imho.

 

[T McGibney]

You refer to things like provision of meals and cleaning of shared facilities not being typical of rental arrangements and sure, if we are talking about someone renting a 6,000 sq. ft commercial unit then you are quite likely correct, but if we are talking about someone renting a room in a house it's far more likely to be a typical part of the rental arrangement imho.

I mean they're not typical of residential lettings where a tenant pays €x per month in rent and does their own thing.