Council tenants allowed rent out rooms for up to €14,000 a year tax-free

Gusser09

Lets say that Johnny living in a 3 bed decides to take this offer up and he moves Bob in who earns 50k per year.

I presume that Bob's salary will be taken into account when calculating the rent due on the property?

LOL.

Victor

One of the problems with council housing, especially older estates is that all the units are the same size. This means that to move to a smaller unit means moving to a different neighbourhood. Potentially that just reinforces stratification and social problems.

"Its not the tenents fault that they end up in a 3 or 4 bed house affter the kids grow up and leave home. The local authorities need a system where tenents are house and moved according to their need." - some councils have schemes where tenants that are over 55 can move to a smaller home

RonanG86

https://www.boards.ie/discussion/comment/120545659#Comment_120545659

Clearly not considering that Johnny can pocket up to €14,000 in tax-free rent from Bob. Not much point if the Council are going to get a big wedge of that as rent. EDIT: Although here's a thought, is it reckonable income for Johnny? Council could get their diff rent from it, I suppose.

There's also the issue to permission to reside. If you're moving into a Council house you're supposed to apply for this and the Council can and will refuse in certain circumstances. In case, for example, if I had decided to move into my ex-girlfriend's Council house when we were together despite the fact that I'm a home owner.

Do you have to get permission to reside for your tenant? What if they spectacularly fail Garda Clearance?

This has not been thought out.

RonanG86

https://www.boards.ie/discussion/comment/120545672#Comment_120545672

Any Council tenant can apply for a transfer on the basis of downsizing, afaik, but chances are they'll be waiting for a long time.

Gusser09

The housing crisis is rapidly catching up with the HSE in the shitshow stakes.

Guildenstern

'Navan has 1,439 applicants, with 646 applicants looking for one-bedroomed units, 523 seeking two-bed units, and 199 applicants wanting three-bedroomed units'.

Recently quoted in the Meath Chronicle. This is the norm across the country. The vast majority of applicants require 1 or 2 bed properties. In a country where we only really built 3, and now, 4 bed houses, to any scale.

At least, this is now recognised, so that's some progress.

Gusser09

https://www.boards.ie/discussion/comment/120545704#Comment_120545704

That's what irks me. We really need to take into account that a lot of people and couple with no kids would be more than happy with a 1 bed apartment of decent quality.

FFS we remove bedsits from the market which were perfectly suitable and good for people at certain stages of life.

That workedo ut well didn't it.

baldbear

I'm sure people with social homes are already renting out spare rooms?

DubCount

If social tenants have excess room capacity, they should be moved to smaller units.

Why should a social tenant receiving a home with extra bedrooms from the state for minimal rent, be allowed rent out space and personally profit from the state's property.

For that matter, why bother to buy your own home and pay your own mortgage when the state will let you stay in a property that is larger than you need and let you make money from the excess space they have provided you.

This is nuts.

RichardAnd

https://www.boards.ie/discussion/comment/120545607#Comment_120545607

This needs to be said more. I'm paying a 34 year mortgage for a house I don't want in a town I dislike because I can't afford to live in Dublin. There are people in fine apartments a stone's throw from where the main office of my company is who get those apartments for a song.

I don't want people thrown onto the streets, but the social housing model needs to be updated.

Mrs OBumble

A marginal rate taxpayer who owns their own home can access this 14k the same way as a council tenant can.

Fred Cryton

The real scandal is how little council tenants are paying themelves to the council and how many pay nothing at all. Something like two thirds in DCC are in arrears.

This is totally out of line with public housing in other countries, a fact that goes unmentioned by our dominant left wing parties and media. Tenants should be forced to pay 20% of their income in rent, even as that income increases. And if they don't they need to be evicted like any other type of tenancy.

Now we have the absurd situation where the government not only allows them to live in the house free of charge, but also to earn a nice income for themselves using a State asset. Ridiculous and one of those "only in Ireland" things.

Danzy

The greatest challenge in the country at the moment is the housing and accommodation shortage.

Anything that alleviates it is welcome.

Does this have problems, certainly but the benefits significantly outweigh the cost.

There is a lot of self pity in the thread but no concrete alternatives.

Pawwed Rig

https://www.boards.ie/discussion/comment/120545865#Comment_120545865

The point

Your head

You assume the marginal tax payer can afford to have a spare room to rent out. Many many cannot.

Emblematic

It does seem a bit unfair however given the crisis that's developed in the country, measures like these need to be made.

RichardAnd

https://www.boards.ie/discussion/comment/120545926#Comment_120545926

Only 20% of their income? To rent a one bedroom apartment in the apartment block near my mother's house is 1500 a month. Let's do some number crunching...

The average wage in Ireland is (according to the CSO) about 44k a year. After tax, that would give a net monthly salary of about 2800 (based on a PWC tax calculation). 1500 euros is a whooping 53% of that net monthly income. 20% is a pittance compared to that.

mrslancaster

https://www.boards.ie/discussion/comment/120545786#Comment_120545786

Agree with some points but it doesnt make sense to start uprooting families and moving them if they end up with a spare room.

Maybe the government should look at a similar scheme to the UK where housing benefit is reduced, ie a higher rent is charged if the property has spare bedrooms. That reduces the cost to the public purse and doesnt disrupt families or communities. Probably easier, cheaper and quicker to administer than building smaller homes.

Will the 14k income affect other welfare benefits that are means tested?

Lionel Fusco

https://www.boards.ie/discussion/comment/120545607#Comment_120545607

The vast majority of people in social housing are in work. More lazy ignorant stereotyping.

Lionel Fusco

https://www.boards.ie/discussion/comment/120545926#Comment_120545926

What happens to people who are evicted from social housing? Do they disappear?

Lionel Fusco

https://www.boards.ie/discussion/comment/120545954#Comment_120545954

All that proves is that the private rental market is far too expensive and strict rent control is urgently needed.

Lionel Fusco

https://www.boards.ie/discussion/comment/120545786#Comment_120545786

Where are all these smaller units that they can be moved to?

Outkast_IRE

The money is tax free, but surely its reckonable income as far as the Department of Social Protection and revenue are concerned. The uptake may be more subdued when people realise they may lose entitlements

RichardAnd

https://www.boards.ie/discussion/comment/120546000#Comment_120546000

It's too expensive due to demand. Even with a price control in place, the issue of demand would not be resolved, and likely such a price control would not be effective. There are two ways to reduce rent prices; reduce the demand or increase the supply. Ideally, we would want to do both, but the state has demonstrated time and time again that it will do everything possible to increase demand whilst keeping supply at a trickle.

tastyt

Another kick in the absolute balls for anyone struggling to get up and work and cut their cloth to pay a mortgage where rates are flying up .

But some die hards will still argue that this is someway fair and a step to alleviate our housing crisis . Will it fck. It might help the council tenant head off for 3 weeks holiday though instead of just the 2 , leaving the poor sod that’s renting off them to mind their house for them after they come home from a 10 hour day , being taxed to the Bollix .

Talk about having priorities upside down

maninasia

I strongly oppose council tenants getting 14k tax free.

Tax free is tax free. It's not going to be recognised as income.

A regular worker in private accommodation might have to be getting 20 or 30k raise or overtime pay to get the equivalent after the taxman comes for him.

Makes me a bit sick reading it to be honest.

Pawwed Rig

https://www.boards.ie/discussion/comment/120545954#Comment_120545954

Hate to break it to you but it is currently 15% of income or less

From DCC website

How is my rent calculated?

You pay a differential rent, which means that the rent charge changes in line with household income. Under the current scheme, rent is charged at 15% of the highest earners income net of specified deductions and 15% of sub-earners income net of deductions to a maximum rent charge for each sub-earner of €21. Because your rent charge is directly linked to household income, you must inform us as soon as any changes in household income occurs. Failure to keep your income details up to date can result in backdating of the new rent charge which will cause your account to be in arrears

How do I keep my household income details up to date?

You should submit copies of income details to our office i.e. P60s/Employment Details Summary, payslips, Department of Social Protection payslips, etc., for all people in your home. These details should be submitted at least once per year.

What happens if there is a change in my family size?

You will need to seek permission from us prior to any new person moving in to your home, you also must inform us if a person in your home moves out as these additions/reductions in household size affect the rent calculation.

RichardAnd

Hmm, just a thought. Could someone apply for rent allowance to pay the rent for this scheme?

FishOnABike

https://www.boards.ie/discussion/comment/120546038#Comment_120546038

Or the regular worker could simply let out a room in their own house under the rent a room scheme.

maninasia

Yes but they have to PAY full whack for their own house by WORKING and SAVING for it.

They had to pay for their house with their after tax income.

And they probably don't get other state supports and certainly no free maintenance and appliances.

That's the difference.

Pawwed Rig

Just doing a bit of number crunching here.

Let's say the household income for a tenancy is 50K for a family in a standard 3 bed council house in Dublin. The rent payable will be 7.5K (50kx15%)

The cheapest place I can see on Daft is 1,850 per month so lets say the property is subsidised by 1,100 per month or 13,200 per annum.

The property can then be sub rented for 14,000 giving a total value of 27,200 to the tenant. The tenant has an equivalent income of

27,200/.48 = 56,666 + (original salary of) 50,000 = 106,666.

This is if the tenant even pays the rent unlike a good portion.

https://www.dublinlive.ie/news/dublin-news/almost-40-million-owed-dublin-25524294

If the tenant doesn't actually pay any rent the above equivalent salary is increased to 122,291

FML