tax on holiday rental in annex to home

M

maria72

Guest
I was wondering if anyone knows the tax implications of renting part of the house (with a separate entrance) as a small self-catering holiday home? I am confused as to where this would fall in tax terms as the rented property woudl actually be part of our main residence.

Thanks for any help!
 
If you intend to earn under 10.000 euros a year then I'd go for the rent-a-room scheme. Taxfree earnings of up to 10k.
The main criterion is that there is internal access from the rented rooms to where you live-otherwise it's not part of your house.

I do this and it's a a very profitable earner .When i get to 10k I stop. Worth 20k gross.
Best thing in the rental market . You don't even have to get a sepArate TV licence.

(Hopefully it won't change in the Budget)
 
Wind-up is right and I was wrong.
Have just read the relevant section 4.3 "business use" of Revenue's guide to the rent-a-room scheme (document 7-1-32) and note that OP must declare a trading income - not even a rental income.
Sorry,OP. Seems a lot of hassle for what is probably a tiny net income.
 
Back to your original question op ... assuming the net income after expenses is greater than €3k ish you'll probably need to file a form 11 declaring the rental income
 
Thank you for the replies. Yes - rent-a-room scheme is the best. Let's see what happens in the budget... A pity as there is a huge lack of holiday rentals in the area and I know it would have worked really well. But not worth it financially.
 
On a connected note I wonder if Windup or our other tax experts could advise the following...

Suppose Maria went ahead and did all the "correct" declaration of trading income for some years.

Would this mean that part of the house -the self-contained annexe used for business purposes - would be excluded from CGT-free sale of priniciple residence if Maria sold her house? That is, would that annex be regarded as a commercial property as it had been used for her "trade" for XYZ years ?

(I wonder how many owners of houses who let the odd room during holiday season really declare it to Revenue? )
 
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