Tax on novel rental scenario

B

BONJOURNO

Registered User
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Hello,

First time poster, interested in picking your brains! Here's my situation:

-Have one property that I currently live in (property 1)

-About to purchase another property some distance away (property 2).

-Going forward, would like to live in property 2, and rent property 1 out. However I would like to also keep a room for myself in property 1 so I can come and go as I please. This is because I have family/friends/roots in the area, and having somewhere to crash there suits me.

-I have a friend who looking for somewhere to live, and is happy to facilitate this arrangement. We get on well, he is happy for me to come and go.

Now my question is, with this arrangement, would it be tax compliant to rent to my friend at a less than market rate, without there being any CGT or gift tax implications? The market value of a property where landlord has continuing free reign would be less than a property where he keeps away, no?

I intend to remain fully tax compliant at all times.

Opinions welcome!
 
As it will no longer be your PPR , it will be subject to CGT anyway. The rent you charge is irrelevant to this.

Revenue would not be interested in CAT on residential properties rented below market rates. If so, half of the tenants in the country would be subject to CAT!

Brendan
 
Correct. If the market rent for an empty property is, say, €2k a month, then it’s substantially lower if let to a friend with the proviso that the landlord can stay there whenever he or she likes.

Revenue would have zero interest in such an arrangement, provided the rent is being returned.
 
That's great, and thank you both for the speedy replies!

My main concern was that my friend would be liable for gift tax on the differential between what he'd be paying me and "market rate"- I was hoping that me still having my foot in the door might ameliorate this, even better that it's not a sore spot for revenue to start with! Thanks again.
 
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I agree with The above posters, if Revenue were going to tax this and thats a big "IF" the market value of the rent as to take into consideration that the LL has a room in the house and can come in as he pleases. If for example it is a 3bed the tenant only has access to 2 beds so the rent would have to account for this.
 
in the same boat as let apt to mate under same agreement, half market price, when l got hitched , 2 years and wanted place to crash the odd time, and not bothered about official letting, at this stage, assume l am liable to pay some form of tax but not on 'rental income'
? l am conscious that l dont want this to get out of control,
 
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