Rent a room Relief

Luternau said:
Do Revenue audit Rent a Room and how could they when some of the agreements are casual or informal agreements between friends or family with payments in cash?
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At the risk of being cynical - I believe that it why the €500 rent-a-room credit for sharers was introduced. Handy way to flush out a few non-declarers.
Luternau said:
I would be pretty certain there are some/many exceeding 14k income. Some may not be declaring any rent a room income on a form 12.
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At current rates in Dublin it wouldn't be hard to exceed the 14k.
 
I think there is a bigger issue for the OP than just the rent-a-room relief. The way they have been splitting the rent means that the renters are tenants, not licensee's. It doesn't really matter that the OP is living there.

To clear this up, the OP should draw up a lease with their sibling to be the sole tenant with an agreed rent for their half of the property. After that, the OP is now free to have the full €14k RaR relief.

The 2022 situation is ineligible for RaR so the OP needs to chalk that one down to inexperience and pay the tax due.

Going forward, the issue the OP will have with not exceeding the €14k is if the sibling wants more than €7k. There is an advantage for the sibling to receive more rent because they are already being taxed. The OP is stuck at €14k ot they suddenly get a big tax hit
 
_OkGo_ said:
The way they have been splitting the rent means that the renters are tenants, not licensee's. It doesn't really matter that the OP is living there.
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I don't think so.

OP can do what they like with the money they are paid; the primary issue as I see it is that the amount is over the 14k limit.
 
_OkGo_ said:
The way they have been splitting the rent means that the renters are tenants, not licensee's.
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So because one of the two landlords is not living in the house the occupants of the rooms are de facto tenants and entitled to RTA protection.

Is that your claim?
 
Less a claim and more of a question but essentially yes, are the renter's tenants because of the sibling landlord or are they licensee's because of the OP being a part owner/occupier?

I don't know the answer definitively but I would be leaning towards it being a tenant relationship with the regular protection.

For the avoidance of doubt, the OP should have an agreement with their sibling to rent their half of the property. They would clearly be the sole tenant in this situation and can manage the subletting as rent-a-room from there up to the full €14k
 
Whoa! We're going down a rabbit hole here. The Residential Tenancies Act is very clear - if the landlord also lives in the dwelling, it's not a tenancy within the meaning of the Act, and the "tenants" do not get the protection of the Act.

In this case it is very clear that the OP is genuinely living in the property and the RTA does not apply.

Section 3 (2) of the Act:

Subject to section 4(2), this Act does not apply to any of the following dwellings—

(a) a dwelling that is used wholly or partly for the purpose of carrying on a business, such that the occupier could, after the tenancy has lasted 5 years, make an application under section 13(1)(a) of the Landlord and Tenant (Amendment) Act 1980 in respect of it,

(b) a dwelling to which Part II of the Housing (Private Rented Dwellings) Act 1982 applies,

(c) a dwelling that is let by or to a public authority and without prejudice to the generality of the foregoing, including a dwelling provided by a public authority to an approved housing body other than a dwelling referred to in subsection (2A),]

(d) a dwelling, the occupier of which is entitled to acquire, under Part II of the Landlord and Tenant (Ground Rents) (No. 2) Act 1978, the fee simple in respect of it,

(e) a dwelling occupied under a shared ownership lease,

(f) a dwelling let to a person whose entitlement to occupation is for the purpose of a holiday only,

(g) a dwelling within which the landlord also resides,
 
_OkGo_ said:
For the avoidance of doubt, the OP should have an agreement with their sibling to rent their half of the property. They would clearly be the sole tenant in this situation and can manage the subletting as rent-a-room from there up to the full €14k
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I think @Right Winger above is correct and the occupiers of the rooms are licensees.

A formal letting agreement with the sister could raise more questions than it answers particularly around the agreed rent if it deviates much from market rates.
 
Just wondering about the audit trail thing?
This would be a licencee agreement so you don’t have to register with RTB or provide a rental contract, record of payments etc as far as I know?
So how could revenue audit it?
 
I think you’d be on a very sticky wicket if you tried to carve-up the rental income on a basis that’s not consistent with the ownership percentages.

I think, for example, retrospectively classifying €2k of 2022 ‘rent’ as a refundable deposit would be perfectly fine.
 
tom1ie said:
Just wondering about the audit trail thing?
This would be a licencee agreement so you don’t have to register with RTB or provide a rental contract, record of payments etc as far as I know?
So how could revenue audit it?
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You include it on your tax return every year so Revenue know who is in the scheme. RTB are very inconsistent re registering, I know this from my own rent a room- one phone call will tell you that you have to register, the other will say you dont. But you definitely do need to do it on your tax return.
 
NoRegretsCoyote said:
If you don't have a tenancy then you don't need to register with the RTB. The occupants of the rooms are unambiguously licensees and not tenants.


It could come to Revenue's attention via various ways and the OP should be both tax compliant and able to show it.
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Ah yeah get ya- I’m not suggesting anything ontoward but I was curious about how revenue could actually conduct an audit as there would be no paperwork between homeowner and licensee- but the amount the homeowner gets from licensee should be declared to revenue alright.
 
NoRegretsCoyote said:
If you don't have a tenancy then you don't need to register with the RTB. The occupants of the rooms are unambiguously licensees and not tenants.
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No, not true. There are two types of scenarios under rent a room.
1. Where you share a house with tenant.
2. Where there is a self contained unit with tenant adjoining your house.

For 2. you need to register with RTB. In both cases rent must not exceed 14k in total per year. In both cases you must include rent in your annual return although you can opt in and out of this if you wish at the beginning of new tenants starting as long as they are in agreement and aware they are licencees.

Sharing accommodation with your landlord

This document explains the position of tenants who live in their landlord's home. There are different rules, depending on whether or not your accommodation is self-contained.
www.citizensinformation.ie www.citizensinformation.ie

'If you are renting a self-contained flat or apartment in your landlord’s home, your tenancy is covered by residential tenancies legislation and your landlord must register it with the Residential Tenancies Board. However, if you are renting a room that is part of your landlord's home, your tenancy is not covered by this legislation'
 
OP here, Back again as I am officially doing my tax return!

Thanks very much for all your detailed responses.

I suppose I was wondering more because my sister was living in Spain, hence would never be able to avail of Rent a Room relief. In that scenario would I be allowed the whole relief. Anyways from your answers it seems I cannot

Note she is paying her own taxes as an absentee landlord on 50% of the rent.
 
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