Renting PPR

I've searched unsuccessfully for the answer to my question throughout numerous threads so I apologise in advance if I am repeating a question or if I have posted this to an incorrect thread.

I own a property, for which I paid stamp duty. I live there permanently and have also rented out a number of bedrooms. The rental income I receive is above the threshold for the ‘rent a room’ scheme and I am just wondering what would my situation be for paying tax on this rental income, i.e how it is calculated?

I did not register with the PRTB as they state that you do not need to register if you are living in the house, however someone mentioned to me in passing that I should have done so regardless of my living situation as it affects the tax that I will pay?

Could anyone give me some advice? Thanks.

You will be better off staying below the threshold.

Welcome to the magical world of the grey areas created by convoluted tax laws.

You indeed have no legal obligation to register with the PRTB. You, however, are not renting the property under the Rent a Room scheme. Have you sent in an annual rental return? I assume not as you state that the income you receive is over the limit - if you'd sent in the return with a value over the limit you'd know all about it.

As such you should then complete a tax return at the end of year indicating your income from rent. You'd then have tax liability at your marginal rate (41%) on the entire income (ouch). However if you are registered with the PRTB you can offset a percentage (most) of the mortgage interest again the rental income and reduce your liability to near zero.

So if your rental income is above the Rent a Room limit and you want to remain tax compliant and minimise your tax bill then you should register - even though you're not obliged to.

Clear as mud? As Bacchus says you'd be better off staying below the limit if possible.

However if you are registered with the PRTB you can offset a percentage (most) of the mortgage interest

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Under rent a room occupants reside under a licence agreement-not a tenancy agreement. If registering with PRTB would the OP have to have to draw up a lease (tenancy) agreement with each person

Welcome to the magical world of the grey areas created by convoluted tax laws

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If all is so-then your opening phrase sums up well.

thanks for your replies .. i'll be sending in the tax return then as I need to rent the rooms (for a fee above the threshold) in order to pay the mortgage!!

I'll also register with the PRTB & hopefully get some info for you Luternau on the lease v's licence issue.

The Bomb said:

thanks for your replies .. i'll be sending in the tax return then as I need to rent the rooms (for a fee above the threshold) in order to pay the mortgage!!

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Are you sure that renting outside of the rent a room scheme for more than €10K p.a. and thus being assessable for tax might not leave you worse off on a net basis than renting under the rent a room scheme for €10K or less tax free?! Have you crunched the numbers?