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Landlords choosing to rent by the room rather than entire property

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    #32
    Galwaystar
    Registered Users Posts: 11 ✭Galwaystar


    In the event of a LL renting out rooms under a license agreement (i.e. exclusive use of a bedroom but non exclusive use of common areas), are such license agreements registered with PRTB or are only leases registered?
    What would be the revenue position of the LL seeking to claim the 75% interest on borrowings deduction for tax purposes? Assume of course that they are not claiming the Rent a Room allowance.


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    #33
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    Galwaystar wrote: »
    In the event of a LL renting out rooms under a license agreement (i.e. exclusive use of a bedroom but non exclusive use of common areas), are such license agreements registered with PRTB or are only leases registered?
    What would be the revenue position of the LL seeking to claim the 75% interest on borrowings deduction for tax purposes? Assume of course that they are not claiming the Rent a Room allowance.

    As the inhabitants are licencees, rather than tenants, there is no tenancy to register with the PRTB.
    With respect of the 75% mortgage interest- that is a matter between the owner of the property and Revenue. Obviously they would have to declare all the income- and be in a position to justify any deductions were they audited (and there is an increasing liklihood that people in these type scenarios will/are audited- where in years gone by, Revenue may not have questioned it).

    So- as long as it stacks up- and the owner of the property gets good tax advice (and Revenue do not give advice- you're going to have to pay for it)- there is no reason you might not run with it.

    Personally- I wouldn't touch this type situation with a bargepole- as either landlord or tenant- its far from satisfactory for both parties (obviously for vastly differing reasons).


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    #34
    4ensic15
    Banned (with Prison Access) Posts: 4,691 ✭✭✭4ensic15


    The_Conductor wrote: »
    As the inhabitants are licencees, rather than tenants, there is no tenancy to register with the PRTB.
    Some PRTB decisions hold that a bedroom is a dwelling and exclusive use of it means a tenancy. It could be very dangerous to get it wrong. If it was held to be a tenancy all tax relief would be clawed back and there would be arrears of registration charges. It suits some landlords to rent that way because there are few voids in between lettings and it is much less likely that a bad tenant can dig in.


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