Renting 'Buy to Let' to son

Clare12

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Looking for the most tax efficient method of doing this, I will have a mortgage on this property, LTV <50%. The monthly repayments will be 900 over 12 years, am aware I don't have to register with RTB, but then I can't claim the interest on mortgage against my tax liability, house is not in a RPZ. Any advice as how to minimise tax? Son and his partner will be residing in the house. Not sure how much rent I would charge him but was thinking about 800 pm.
 
Looking for the most tax efficient method of doing this, I will have a mortgage on this property, LTV <50%. The monthly repayments will be 900 over 12 years, am aware I don't have to register with RTB, but then I can't claim the interest on mortgage against my tax liability, house is not in a RPZ. Any advice as how to minimise tax? Son and his partner will be residing in the house. Not sure how much rent I would charge him but was thinking about 800 pm.

Get professional advice. Otherwise you're at risk of making expensive mistakes. The assumption I've highlighted is wrong, for starters.
 
https://www.lawyer.ie/property/registering-your-tenancy/
According to this, then the property does not have to be registered.
Well then you're fine. If you don't have to register, then you aren't breaching the Residential Tenancies Act and your entitlement to mortgage interest deduction is safe. Don't uncritically believe all you read on tax on websites. While most of it is ok, technical nuances can often get lost.
 
I don't think I'm entitled to the mortgage interest tax relief if not registered, it's a catch 22 really, register with all its conditions plus avail of the tax relief, don't register and forfeit the tax relief, anyway, as you have suggested, better pay for some financial advice, should be worth it given the complexities of this.
 
That's what I was thinking, I have calculated the tax element of the monthly mortgage, but I will have to register as a landlord to avail of this, probably worth it in the long run, and as I've stated earlier, it's not a rental pressure zone which won't affect the future sale price of the house if I do limit the rental.
 
I don't think I'm entitled to the mortgage interest tax relief if not registered, it's a catch 22 really,

Relax, there's no catch 22. Clarifying this sort of misunderstanding is precisely why paying a few bob for advice will be money well spent. Good luck with it.
 
I remember hearing that if the rent is set below the market rate then the difference between the two will be deemed a gift to your son which could have tax implications for him. I think this may be offset by the €3k annual gift exemption which would also be allowable for his partner but nest to clarify with a professional.
 
https://www.lawyer.ie/property/registering-your-tenancy/
According to this, then the property does not have to be registered.
1. The following properties are excluded from the requirement to register with the Private Residential Tenancies Board (PRTB).
(g) A dwelling in which the spouse, parent or child of the landlord is resident and there is no written lease or tenancy agreement.

That seems pretty clear. But if it were me I'd be enquiring directly with the RTB because of the son's partner. I supposed if it is solely the son paying the rent than that's ok, and whatever side arrangment the son has with the girlfriend would be their business.
 
Looking for the most tax efficient method of doing this, I will have a mortgage on this property, LTV <50%. The monthly repayments will be 900 over 12 years, am aware I don't have to register with RTB, but then I can't claim the interest on mortgage against my tax liability, house is not in a RPZ. Any advice as how to minimise tax? Son and his partner will be residing in the house. Not sure how much rent I would charge him but was thinking about 800 pm.
It's not at all clear how much interest you are paying. You'd need to know that to figure out how much you are losing on tax relief. With low interest rates it might not be much.
 
I supposed if it is solely the son paying the rent than that's ok,

That is a very good point.

Do a formal rental agreement with your son only.

Not only does that appear to protect you from the possible rent restrictions, it would also protect you in the event that your son breaks up with his girlfriend.

Brendan
 
That is a very good point.

Do a formal rental agreement with your son only.

Not only does that appear to protect you from the possible rent restrictions, it would also protect you in the event that your son breaks up with his girlfriend.

Brendan
It also means that she would then be a licensee and much easier to get out than if you're in a landlord/tenant scenario.
 
1. The following properties are excluded from the requirement to register with the Private Residential Tenancies Board (PRTB).
(g) A dwelling in which the spouse, parent or child of the landlord is resident and there is no written lease or tenancy agreement.

That seems pretty clear. But if it were me I'd be enquiring directly with the RTB because of the son's partner. I supposed if it is solely the son paying the rent than that's ok, and whatever side arrangment the son has with the girlfriend would be their business.

For God's sake, don't do that. They have no duty of care to you and have a vested interest in maximising the numbers registering.
 
I don't care if they have a duty of care to me or not. But they are supposed to be there to guide one.
 
I don't care if they have a duty of care to me or not. But they are supposed to be there to guide one.
Fat lot of good that is if they mislead the OP and then cite "terms and conditions" to escape liability for their loss afterwards.
 
I see all here are as confused as I am or have their own interpretation/understanding of the RTB requirements. There are so many different scenarios, definitely need good tax/financial advice, offhand I think the tax portion of the mortgage comes to 375 per month, next year the allowance goes to 80% so that would be 300 X 12 i.e. 3600 allowable.

For God's sake, don't do that. They have no duty of care to you and have a vested interest in maximising the numbers registering.

Would you mind explaining this, I'm a bit lost, are you saying I should register?

The suggestion about having the partner as a licencee has crossed my mind.
 
Would you mind explaining this, I'm a bit lost, are you saying I should register?

????

I'm most certainly not saying that and I'm highly alarmed that you could read that into what I said.

In other words. The PRTB are not in the advice business. They're in the business of registering tenancies and the more tenancies they register, the more fees they collect. Like other State bodies, they routinely disclaim responsibility when they make mistakes.

I see all here are as confused as I am or have their own interpretation/understanding of the RTB requirements.

And I'm most certainly not confused, but merely trying to help you. Silly me for breaking the first rule of AAM - never bother responding to a query from a new poster who doesn't use the word please.
 
Go back to your first post and then tell me you are not confused,
Anyway, I've come across this on citizens information site
'For you to qualify for rent-a room relief, your home must be located in the State and you must occupy it as your sole residence during the year of assessment. This means that it is your home for the greater part of the year and is where people would normally expect to make contact with you. In most cases, you do not have to own the property – you could be a tenant and be sub-letting to someone else. (In these cases, you should check with your landlord that sub-letting is allowed – see our document on tenants’ rights and obligations.) However, if you are renting to a HAP tenant you must own the property and provide proof of ownership.'
From this, my understanding is, my son could sublet a room and clain the rent a room relief. This is quite interesting.
 
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