Investment Property - Income from Students sharing with rent-free family

T

TBorder

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Hi
I have a property in Dublin which my student children will use for free from September onwarsds along with two other rent-paying students. I am wondering if the expenses relating to rental of the investment property such as mortgage interest(85%), Maintenance, Services etc can be deducted from the rental income, or can only a proportion of these expenses associated with the rent-paying students be allowed, or even if an imputed rent needs to be attached to my children before expenses are considered. Any information or links would be greatly appreciated. Thanks.
 
I imagine it will have to be a percentage. Can't see how an imputed rent would arise here. Work on the basis of the current rent versus the new rent to work out the percentage. But you need to discuss with your accountant for sure.
 
I cant see how it would make a difference. The allowable expenses are offset against any rental income, and you don't have any rental income from your child. You could argue that allowable expenses don't really vary much if there are 2 or 3 residents.

Formally, you could engineer a tax liability by giving your child €5k as "maintenance" who then transfers it back to you as "rent".

Open to correction on this.
 
I would allocate the expenses on a percentage basis.

e.g. it’s a four bedroom house, my kids live in two bedrooms and strangers pay rent for the other two bedrooms; in such circumstances I’d take 50% deductions for everything.

There would be no CAT issue as they’re young students so the Section 82 exemption would apply (i.e. “support, maintenance, education”).
 
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