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Renting in owner occupied house

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  • 29-09-2007 7:23pm
    #1
    git_ireland
    Registered Users Posts: 352 ✭✭


    Hi Guys,

    Me and brother bought a three bedroom house last year. with all the increases in the rates it is getting a bit tight. thinking of renting the spare room ( double ). My question is because we are owner occupiers and renting out one room to help our payments do we need to be registered or anything. If there are loads of legalities in relation to this it might not be a runner for us.

    What can we or have we to do?

    Any help or points in the right direction are greatly apreciated.


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    #2
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    Hi-

    As owner occuppiers renting out a single room in your home you qualify for the Rent-a-Room scheme this link from the Revenue Commissioners website provides some information (note: skim through to page 41). You are entitled to earn €7,620 exempt from tax under the rent-a-room scheme per annum (note: this is inclusive of all payments- including billshares etc from tenants). If you stay under the €7,620 you will not have income tax liability, but if your income is €7,630, you could have a liability of up to €3,586, including PRSI, levies and income tax at the top rate of 42 per cent- so you have to be very careful not to go over the threshold!!!

    Also, the relief is given in respect of a ‘qualifying residence'. When income arises for two or more people from one qualifying residence, the annual limit is divided by the number of people involved. So you and your brother renting out a room in your first house cannot receive income of €7,620 each without incurring any income tax liability. As the income arises from the one property, only one limit of €7,620 will apply, divided between the two individuals.

    You do not have to register with the PTRB, and the accommodation does not need to comply with minimum standards- you do however have to declare the income in an annual tax return (and the person renting the room is entitled to claim rent-relief, so if you don't make a tax return its only a matter of time before you have the Revenue Commissioners after you......)

    So- €7,620 a year tax-free- €635 a month- would be helpful I dare say!


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