Rent a room and self contained unit.

Beanybabog

I am thinking about purchasing a property that is divided into two parts - main house and basement flat. OH wants to rent it out - I don't unless we can go for rent a room. As iuf's self contained I don't think we can. However if I rented 1 or two rooms individually (it's a three bed) and maintained access could I do it that way? Or does it still need to be connected to the main house and give access there?

Michael D Not Higgins

Unless it's connected physically to the main house, e.g. with a door, you will not qualify for rent a room. http://www.citizensinformation.ie/en/housing/owning_a_home/home_owners/rent_a_room_scheme.html

Renting the rooms separately and maintaining access may qualify the lodgers as licensees but it still won't cover you for rent a room.

Pat Mustard

Moved to Accommodation and Property. Please note that their charter applies.

It can be totally self contained and even have its own separate entrance but needs access to the main house also even if its a permanently locked door.

Beanybabog

Thanks that's what I thought. It doesn't - I don't know if the house was built like that but there's no stairs down.

Gumbo

Has it got Planning, Fire Cert and Disability Access Certificate for the sub division?
A few like this for sale in Dublin 7.

Mrs OBumble

Beanybabog wrote: »

I am thinking about purchasing a property that is divided into two parts - main house and basement flat. OH wants to rent it out - I don't unless we can go for rent a room.

By rent-a-room, to you mean

1) have the tenants actually as licensees rather than tenants, so that tenancy law doesn't apply?

or

2) Access the Revenue scheme which allows you to make up 12k and not pay any tax on it.


There's more greyness in 1) than there is in 2).

Beanybabog

I have no idea, we haven't bid and such have no access to deeds. Its one house but I have no idea how it ended up like this as there is no stairs down, which suggest to me it was built like that. The main house was listed on the prtb, the basement was not. I understand it has been rented for many years, but I don't know whether both units were and only one was registered with the prtb.
There are no planning applications in respect of the property on council website so I assume any application predated whenever they started uploaded the applications online

Beanybabog

Mrs OBumble wrote: »

By rent-a-room, to you mean

1) have the tenants actually as licensees rather than tenants, so that tenancy law doesn't apply?

or

2) Access the Revenue scheme which allows you to make up 12k and not pay any tax on it.


There's more greyness in 1) than there is in 2).

Both? I assume most people having licensees apply for the relief. The OH suggested rent out the basement apartment but my view is that we would be 1. bound by tenancy laws (not so much as problem as we would not be renovating for a number of years and as such I assume we could use the termination reason that we need it to live in - i.e. building into it) and
2. register for tax on it.

The only way around the above seems to be to rent a single room, or two, even then I would be obliged to build a stairs down and connect to the main house in the first place.

You might get away with an attic stairs type setup which would be much less invasive than adding a full stairs and it should satisfy the rules for applying for the rent a room relief.

I have to admit that in looking for places to buy myself I'm keeping a close eye for anywhere that has or could easily be altered to give a self contained area which could be rented out under the rent a room scheme thus generating tax free income but not having to really share with the people living there at all.

There are some very interesting properties out there. One I saw recently was an extended end of terrace house which was essentially two terraced houses being sold together, knock a door way between the two units put a locked door and you could rent out a three bed house essentially (renting the rooms separately of course) and get the close to the full 12k tax free. Would cover the mortgage every month on the entire property with a bit left over even.

PhoenixParker

You'd be crazy to rent a 3 bed for less than the E12k a year rent a room limit, even in the bigger regional towns you'd easily get more than that.
Depending on location, you could also consider renting it as a commercial let.

If you're absolutely determined to go for rent a room, this might sound like a crazy question, but are you absolutely sure there's no stairs? I've known the stairs to be simply blocked up or boxed in many times in houses like that.

Beanybabog

PhoenixParker wrote: »

You'd be crazy to rent a 3 bed for less than the E12k a year rent a room limit, even in the bigger regional towns you'd easily get more than that.
Depending on location, you could also consider renting it as a commercial let.

If you're absolutely determined to go for rent a room, this might sound like a crazy question, but are you absolutely sure there's no stairs? I've known the stairs to be simply blocked up or boxed in many times in houses like that.

It wouldn't suit a commercial let. 2 beds close by rent for 1700-2200 pm but this wouldn't be the most salubrious looking apartment so I'd have to knock a good bit off that - it appears functional but not very pretty. It's the tax thing that really puts me off, like I know I'd have to do a return, save for taxes, apportion mortgage interest between house and flat? Seems complicated .

Mrs OBumble

Beanybabog wrote: »

It's the tax thing that really puts me off, like I know I'd have to do a return, save for taxes, apportion mortgage interest between house and flat? Seems complicated .

You will have to do a return anyway if you have income, even if it's under the 12k.

Paying an accountant to do it for you is likely to be worthwhile - they will likely save you more tax than they will cost.

But if you cannot cope with saving for tax payments (by putting 50% of the income each month into a separate bank account which you just use for tax), then you should not buy this house, or any other.

Beanybabog

Mrs OBumble wrote: »

You will have to do a return anyway if you have income, even if it's under the 12k.

Paying an accountant to do it for you is likely to be worthwhile - they will likely save you more tax than they will cost.

But if you cannot cope with saving for tax payments (by putting 50% of the income each month into a separate bank account which you just use for tax), then you should not buy this house, or any other.

I may buy the house anyway and simply not rent any part of it - it will be a family home and ideally I would convert it into 1 eventually. Renting the basement flat was my OH's idea, not the goal, I am not an investor. I just don't know if it would be worth it

Mrs OBumble

Mrs OBumble wrote: »

You will have to do a return anyway if you have income, even if it's under the 12k.

Paying an accountant to do it for you is likely to be worthwhile - they will likely save you more tax than they will cost.

But if you cannot cope with saving for tax payments (by putting 50% of the income each month into a separate bank account which you just use for tax), then you should not buy this house, or any other.

The return for rent a room is very straight forward and would not need an accountant.