Rental Query - 50% of house letting

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Nutso

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I have posted previously about my tenants giving notice and leaving our property. Due to a possible change in circumstances in my husbands employment in recent weeks, it now may make sense for us to let one or two bedrooms and keep the remaining bedrooms for our own use and to come and go as we please.

The property would not be our PPR so the income would still be taxable. If we for e.g. let 2 bedrooms (out of 4) could we claim 50% of the usual rental expenses against our rental income?

Thanks,
Nutso
 
There are two opinions about renting a room/s with a tenancy agreement.

One opinion believes that the landlord has the right to access the property without notifying the tenants and that he may come and go as he pleases.

The other train of thought believes that as a tenant has "exclusive" use of the room he rents and shared exclusive use of the remainder of the property and facilities provided (kitchen, living room, non-ensuite bathroom, etc). Thus, the landlord does not have access to the property as and when he pleases and must make an appointment with the tenants.

As regards the usual expenses, I think but stand to be corrected, that it may depend on which opinion you wish to follow.

The latter, would certainly follow the normal tax implications though the former may not as you would be renting part of it and using the other part yourself.

As I am not full up to speed on rental taxes I won't even give an opinion.
 
Thanks Facetious, I appreciate the reply. It seems a bit complicated.

I was also checking regarding a licensee arrangement, which says the following:

"If the part of your home that you rent out is not self-contained, you are not covered by landlord and tenant legislation, so the rights and obligations under that legislation do not apply to you. For example, you are not obliged to register as a landlord with the RTB, provide a rent book to the tenant or ensure that the accommodation provided meets any minimum physical standards."

And

"You cannot deduct expenses from your rental income while claiming rent-a-room relief. However, depending on the circumstances, it may be worth your while to opt out of the relief in a particular year in order to offset expenses against the rental income and avail of wear and tear allowances".

We will not be claiming rent-a-room relief as it won't be our ppr so I will need to do a bit more investigation and see where exactly we stand.
 
I do not think this 'come and go' as you please will wash with either the PRTB or the Revenue Commissioners. Plenty of landlords maintain locked rooms in houses which the tenants shouldn't access.

Sounds like a standard letting to me.
 
Setanta12 said:
I do not think this 'come and go' as you please will wash with either the PRTB or the Revenue Commissioners. Plenty of landlords maintain locked rooms in houses which the tenants shouldn't access.

Sounds like a standard letting to me.
Click to expand...

May I ask why you think that a licensee arrangement would not be suitable? They go on all over the country. We don't want to let the whole property as we may need to use it ourselves for my husband's employment. Due to school etc it will not be possible for my son and I to move permanently, however I work from home so we could be there for holidays etc.
 
If audited, you should have stronger arguments than; 1) partly used for employment/self-employment purposes 2) used partly and occasionally for holidays 3) renter agreeing to a reduction in his rights (no tenant rights if a licensee; so he would be a fool to pay market-rate tenant rates) and signed a legal agreement to this effect and was available to prove to Revenue he knew what he was getting into.

If it looks like, walks like ... etc.

In the end it doesn't matter though. You will be taxed on same income/expenses in same manner. Letting v license is a moot matter for taxation purposes here.
 
The tax treatment here is relatively straightforward. I would be more concerned about the legal question of tenancy or licence, which determines whether or not rights & responsibilities arising from Residential Tenancies Act apply.
 
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