Renting out my house

3DataModem

Ok now we've moved from what's "legal" to what's "fair".

I don't believe it is "fair" that a person outlaying rent gets no relief at all for the rent income on their previous home (in the curcumstances described above).

OP what you are proposing is very likely to be completely legal - you can decide yourself if it's "moral". iMo it is.

adrianw

My original post:
'Depends on what you mean by a couple of nights. If it was just Friday, Saturday and Sunday, then it is highly unlikely Revenue would entertain that argument.
The place he is renting even if it was just a room in a B&B can still be classified as a Principal Residence.'

If an individual owns a property and moves within Ireland and as you said NOX001 is in a property 'for the greater part of the time and where friends and correspondents would expect to find him/her' - being Monday to Friday, this can be deemed by Revenue to be their principal residence, which is what I said.

If you are from Connemara and buy a house there, but live in Dublin Monday to Friday, your house in Commemara may be your HOME but it is not you PPR.

As per 3DataModern what is fair and what is legal are very different.

3DataModem

Actually if you were there Fri, Sat and Sun revenue would definitely be happy to call it your PPR.

If you lived and worked abroad and spent only two nights a week in the house, they would be quick to define it as your PPR and make you tax resident there.

sunnysoutheast

adrianw wrote: »

Point noted The_Conductor, however I feel I have been civil. I did not make any disparaging remarks against Sunnysoutheast. I am merely defending my original post which he said was nonsense.

I have asked him to provide legislative backup to this comment or to provide an apology, neither of which have been supplied.

Sunnysoutheast, the legislative reference states an individual can only have one Principal Residence - it does not say the accommodation has to be a property owned by the individual - as per a Revenue note.

www.revenue.ie/en/about/foi/s16/income-tax...tax.../19-07-03.pdf

Link doesn't work.

I am aware that an individual can only have one PPR.

The issue I had with your post is that, as far as I can ascertain (and I have seen no evidence provided by anybody which contradicts this) the fact that an individual stays away from their "main residence" during the working week has no impact on the designation of that home as their PPR, always assuming that they are genuinely living there. They are of course free to nominate any other property as their PPR should they wish, but it is difficult to see any advantage to doing so here.

Given this position, as the status of the PPR is therefore not in doubt, I believe the use of rent-a-room relief is similarly available to that individual. In fact, I would hazard a guess that the income from rent-a-room relief on their PPR is cross-subsidising the costs for people staying away for work in a large number of cases at present.

I am not going to be able to prove a negative as I see no legal or tax issues with the above arrangement that would be need to be specifically legislated against. If you believe differently, then please provide a verifiable source which contradicts or corrects my understanding for all our benefit. Thanks.

adrianw

adrianw wrote: »

If you are from Connemara and buy a house there, but live in Dublin Monday to Friday, your house in Commemara may be your HOME but it is not you PPR.

If you are renting a full apartment in Dublin, having bills and correspondence going there etc etc then then I could see how it could be argued.

If you are simply crashing in a houseshare monday to friday or staying in a B&B I don't think they could possibly define it as your PPR? you have absolutely no ties whatsoever to the place.

If on average throughout the year you spend more nights at home than in the other place then you definitely cant argue its not your PPR and given you are home for long periods during holidays etc that will all add up also.

sunnysoutheast

Angelina Mango Tutor wrote: »

If you are renting a full apartment in Dublin, having bills and correspondence going there etc etc then then I could see how it could be argued.

If you are simply crashing in a houseshare monday to friday or staying in a B&B I don't think they could possibly define it as your PPR? you have absolutely no ties whatsoever to the place.

If on average throughout the year you spend more nights at home than in the other place then you definitely cant argue its not your PPR and given you are home for long periods during holidays etc that will all add up also.

I would expect that Revenue would be far more interested in people nominating an owned Dublin property as their PPR in order to sell it CGT-free. It might be difficult to sustain such a nomination if, for example, your family still lives in the country and you return there every weekend. I think a married couple will only have one PPR between them anyway, I'm not sure on that.

adrianw

Once again, I will refer to my original post which stated that even if an individual owns a property but lives elsewhere, the second property even if this is B&B can be deemed to be their PPR.

Legislative reference previously provided Sec 604 states:

For the purposes of this section, an individual shall not be treated as having more than one main residence at any one time and in so far as it is necessary to determine which of 2 or more residences is an individual's main residence for any period—


(a) that question may be determined by agreement between the inspector and the individual on the latter giving notice in writing to the inspector by the end of the year 1975-76 or within 2 years from the beginning of that period if that is later, and


(b) failing such agreement, the question shall be determined by the inspector, whose determination may be as respects either the whole or specified parts of the period of ownership in question.

Does the legislation say that a Residence = house you own? no.
Is it possible to live / reside in a B&B? Yes.
Would this be enjoyable? Probably not.
Does this matter from a legal standpoint? no.

Some people are completing missing the point and are arguing that the house they own is their PPR and not the place where they actually live for 5/7th (or any other portion of your choosing) of the week.
Will Revenue entertain this argument? Yes.
Is there a chance the individual will be successful? Yes.
Is it 100% guaranteed they will be successful? No.

Rationale: For trying to argue that your property owned is not your PPR? Plenty, however advice on Property Tax Planning is prohibited here.

So as previously requested please provide legislative reference where it says a B&B / rented accommodation CANNOT be deemed to be your PPR, which was the original post which was declared nonsense.

The above legislation clearly states that any one of two or more residences can be deemed a main residence. Main residence = PPR.

sunnysoutheast

adrianw wrote: »

Once again, I will refer to my original post which stated that even if an individual owns a property but lives elsewhere, the second property even if this is B&B can be deemed to be their PPR.

Legislative reference previously provided Sec 604 states:

For the purposes of this section, an individual shall not be treated as having more than one main residence at any one time and in so far as it is necessary to determine which of 2 or more residences is an individual's main residence for any period—


(a) that question may be determined by agreement between the inspector and the individual on the latter giving notice in writing to the inspector by the end of the year 1975-76 or within 2 years from the beginning of that period if that is later, and


(b) failing such agreement, the question shall be determined by the inspector, whose determination may be as respects either the whole or specified parts of the period of ownership in question.

Does the legislation say that a Residence = house you own? no.
Is it possible to live / reside in a B&B? Yes.
Would this be enjoyable? Probably not.
Does this matter from a legal standpoint? no.

Some people are completing missing the point and are arguing that the house they own is their PPR and not the place where they actually live for 5/7th (or any other portion of your choosing) of the week.
Will Revenue entertain this argument? Yes.
Is there a chance the individual will be successful? Yes.
Is it 100% guaranteed they will be successful? No.

Rationale: For trying to argue that your property owned is not your PPR? Plenty, however advice on Property Tax Planning is prohibited here.

So as previously requested please provide legislative reference where it says a B&B / rented accommodation CANNOT be deemed to be your PPR, which was the original post which was declared nonsense.

The above legislation clearly states that any one of two or more residences can be deemed a main residence. Main residence = PPR.

So this section clarifies the situation when an asset is being sold, and whether it qualifies for PPR relief for CGT. Is that correct?

However, as I said previously, the part of your original post that I do not agree with (and in the interests of keeping the discussion civil I am happy to apologise for using the overly harsh word "Nonsense") is the contention that simply because a person stays away from home during the working week this means that their "main home" is not then considered to be their PPR, both for the purposes of CGT relief and for the operation of the rent-a-room scheme. I have seen nothing, anywhere, that supports this view and I know many people who have sold houses as PPRs without issue having travelled away for work for years.

Of course, as I understand it, someone can nominate another owned property, rented property, B&B, hotel, hen house as their PPR if they want but if they do not their "main home" will remain as their PPR.

The other question is when the Revenue would actually be involved. When selling property - yes. Possible with an inspection as defined above.

In the scenario outlined in the thread - Person A keeps main home but works away, Person B rents room under rent-a-room, Person A puts rent as exempt on tax return. When do Revenue get involved here?

adrianw

Thank you,

So this section clarifies the situation when an asset is being sold, and whether it qualifies for PPR relief for CGT. Is that correct?

Yes as it does not say the PPR has to be a house / apartment / other form of accommodation.

Most people who own a property 'down the country' and rent and work in Dublin are generally deemed to have their main residence / PPR as the house down the country where the wife and kids live.

The reason a rented house could be deemed a main residence is to prevent someone buying a 4 bed house, renting out 3 bedrooms, leaving the box room empty and claiming it as their PPR, while living with the folks or other half elsewhere to avail of the Rent a Room Relief.

Revenue need to have legislation they can reply on to prevent abuse.

In the scenario outlined in the thread - Person A keeps main home but works away, Person B rents room under rent-a-room, Person A puts rent as exempt on tax return. When do Revenue get involved here?

The individual who owns the house does need to declare it even though it is exempt. Revenue do not check every self declared income tax return, however if they were to check, evidence to support a claim would need to be supported by petrol receipts to fund a round trip from Dublin to Galway or train tickets, Car service history with record of mileage, money withdrawn from the drink link in both cities or other evidence to show you are commuting at the weekend.

adrianw

adrianw wrote: »

The reason a rented house could be deemed a main residence is to prevent someone buying a 4 bed house, renting out 3 bedrooms, leaving the box room empty and claiming it as their PPR, while living with the folks or other half elsewhere to avail of the Rent a Room Relief.
.

I dont think the above is a good example of the reasons for revenue enforcing a PPR requirement as this scenario would be virtually impossible to police. What a lot if not most people who are abusing the rent a room are doing is what you describe above but then rent or own another house.

If the person is living at home so paying no rent or living with a partner and again leaving no record at all that they live anywhere bar the house they own it would be next to impossible for revenue to find out, compared to it being much easier if the person is living their live somewhere else, paying rent, correspondence registered etc.

filbert the fox

Angelina Mango Tutor wrote: »

I dont think the above is a good example of the reasons for revenue enforcing a PPR requirement as this scenario would be virtually impossible to police. What a lot if not most people who are abusing the rent a room are doing is what you describe above but then rent or own another house.

If the person is living at home so paying no rent or living with a partner and again leaving no record at all that they live anywhere bar the house they own it would be next to impossible for revenue to find out, compared to it being much easier if the person is living their live somewhere else, paying rent, correspondence registered etc.

I'm glad someone highlighted this outrageous injustice which is the TAX FREE rent a room scam.
Genuine landlords are crucified with charges/marginal tax/ prsi/ usc/ prtb/ etc. whereas it now emerges that the scheme is open to abuse.... There should be a level playing field - reduce the landlord tax and introduce the rent a room tax so we can all have a just system.

filbert the fox

filbert the fox wrote: »

I'm glad someone highlighted this outrageous injustice which is the TAX FREE rent a room scam.
Genuine landlords are crucified with charges/marginal tax/ prsi/ usc/ prtb/ etc. whereas it now emerges that the scheme is open to abuse.... There should be a level playing field - reduce the landlord tax and introduce the rent a room tax so we can all have a just system.

The majority of people doing rent a room dont abuse the system the same as the majority of landlords dont.

Most people do it to help with their mortgage and live in the house with the people or possibly live away for part of the week for work (which is fine too). This is very different to a LL as the person is sacrificing their privacy, they have a stranger living in their home and dont have full use of it etc where a LL is operating a business.

I think it would be madness to remove the rent a room scheme. It would help nobody and would gain very little extra income for revenue as people would just not bother renting a room (and thus reduce availability and increase rents elsewhere) or they would just operate cash in hand and not pay the tax anyway.

athtrasna

This thread has gone dreadfully off topic and has been monopolised by a few posters. Please take it to PM rather than continue to derail this thread.

Mod