Renting Out Rooms in PPR/Renting during the week someplace else

muinteoir

Registered User
Messages
102
I am wondering what the complications of doing this are and if there are tax implications. A friend has accepted a job which means he will need to rent a room/pay for a B & B during the week as it is nowhere near where he lives. He was wondering if he can write off the expense again tax. He expects to be able to return home at the weekends so does not want to rent out his home but he is going to let rooms in the house under the rent a room scheme so that the house is not empty during the week. Are there any tax implications with doing this? It is his PPR.
 
A friend has accepted a job which means he will need to rent a room/pay for a B & B during the week as it is nowhere near where he lives. He was wondering if he can write off the expense again tax.

Based on these facts, I would say that expenses cannot be claimed against tax. Your friend made a choice to take a job far from where they resided. Perhaps they could work out a re-location package with the employer as part of the remuneration.

He expects to be able to return home at the weekends so does not want to rent out his home but he is going to let rooms in the house under the rent a room scheme so that the house is not empty during the week. Are there any tax implications with doing this? It is his PPR.

For rent-a-room relief to apply it has to be "occupied by the individual as his or her sole or main residence during the year of assessment." Someone whose main residence is 5 days a week elsewhere would not meet this hurdle I'd imagine.
 
Ok thanks for that. I thought that there might be a problem with the rent-a-room part. What is the tax rate that that income would be taxed on?
 
What is the tax rate that that income would be taxed on?

Total up the income received (e.g. €500 a month for 12 months). €6,000 in this example.

Your friend would be able to deduct expenses (advertising on Daft etc.) against rental income. Say €500 in total for the purposes of this example.

The taxable rental income (Case V in tax parlance), is the income less expenses, €5,500.

The €5,500 is added to your friend's employment income in the overall tax computation.

If the employment income is above the standard rate threshold of €35,300, then the extra €5,500 Case V income will be taxed at 40%. If the employment income plus €5,500 is less than €35,300 then everything is taxed at 20%.

PRSI of 4% will also be due on the €5,500. USC too.
 
There's no problem with rent a room applying here, particularly if the person in question is staying in b&b or similar short term accommodation during the week while working away (although, even if they're paying to rent a room elsewhere, which would be available 7 days, it's still unlikely to be a problem).

I presume when there's bank holidays, annual leave etc, they return and stay in the house they own.

Presumably all their stuff will still stay in that house, other than a bag they pack and bring with them while working away.

Clearly, someone who stays elsewhere for commuting purposes hasn't changed their residence.
 
His plan is to return home for every holiday and presumably most weekends and all his stuff would still be in the house. Thanks everyone for the clarification. Thanks for the link as well. I'll send on that information to him.
 
Back
Top