Owner Occupier and Room rental

K

karlod

Registered User
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Hi everybody

Had a look about and couldnt really see anything about this.

I bought a place with a mate, joint owners and have lived in the apartment since feb '08. I am heading away travelling for a while in january and plan to rent my room while gone. My mate is still living in the place.
Im not sure where to start with this, outside of putting up an ad.
Do i need to register the place with anybody? What taxes am i liable to pay (if any). I know you can receive a limit of rent a year (10000?) and not have this impact your personal taxes am i right in this the case? Should i impose a lease to any potential tenants.
any other useful information

Thanks
Karl

Ps sorry if post is vague. not a clue about renting
 
The rent-a-room scheme only applies where the landlord is also resident in the property AFAIK, I'm unsure as to what happens where half the landlords are resident.
 
I imagine the rent a room scheme is not open to you personally as you won't be living there, but would be open to your fellow owner. He could simply let the room under the scheme and pay your share of the mortgage with the money. I presume you trust him as you bought a property together.

There is no tenancy with the rent a room scheme-make sure you don't use a standard rental agreement that uses phrases like 'landlord' and 'tenant' because these don't apply here. There is a licence in place, not a tenancy. The rent a room licencee (the 'tenant') can be booted out at any time and is not covered by the Private Residential Tenancies Act (a good thing for the owner!).

The 10,000 tax free exemption doesn't affect other income so your co-owner shouldn't have a problem from that end and it would be fully legit this way as it is clearly still his PPR whereas it is not clearly still yours (as you'll be away travelling).

If your mate is not agreeable to the above (in my view the simplest solution) then maybe have a chat with an accountant (if no concrete advice comes along here) as you don't want to leave yourself open to a tax bill/stamp duty clawback etc.

An interesting tax question nonetheless....
 
Murphaph

Thanks for the help there. Im taking from above, that i can simply rent the room in my absence and not have to worry about tax bills and stamp duty? Thats good to know. Is it advisable to have some sort of contract with any potential 'Tenant', ie, minimum term, minimum time given for moving out, etc?
I do trust the my mate wont run away with the money, he's too lazy :eek:
 
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Don't take my word as gospel. This is a relatively unusual sitiuation I would have thought. You should at a minimum seem WRITTEN confirmation from revenue that it is allowed and that it will not affect any stamp duty issues.

But assuming your mate is willing to be 'landlord' and use the scheme then he can (under the present rules) take up 10 10k rental income and it will all be tax free. Nice eh?

He will have to declare the income to revenue next year of course and avail of the relief, just to keep it all above board, but so long as he keeps the rent for the lodger below 10k it's tax free (at present).

Yes, a basic agreement should be drawn up about what you expect of the tenant etc. but it should be made clear that the 'tenancy' is not covered by the Residential Tenancies Act and so no PRTB registration is required and the 'tenant' can be (legally) ejected pretty much at any time. The tenant may wish to have a 1 year agreement in place (understandable) but it should be made clear to them that they are lodging and the PRTB does not apply. It's only fair to them that they know they have no legal protection under the scheme.
 
Thanks again murphaph.
Sorry i didnt mean to imply that i was taking what you said word for word. Just wanted to make sure i understood what you were saying. Think i have afair idea now.
thanks
 
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