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Rent a room scheme

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  • 29-07-2008 6:50pm
    #1
    Ginger83
    Registered Users Posts: 3,461 ✭✭✭


    Hi, hope someone can explain this.
    I bought a house last year and am looking into renting a room to a relation.
    If I earn say 40k a year and receive 7-8k a year in rent am i liable to pay tax on this rent.
    I have read the 10k limit stuff but am slightly confused.
    Thanks.


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    #2
    Eurorunner
    Closed Accounts Posts: 2,393 ✭✭✭Eurorunner


    As long as you come in below the €10k, theres no problem. You need to declare this in your tax return (even though its below the 10k) each year.

    Only thing to watch is that people can claim for rent + bills that you charge them for eg. esb, bins, phone, etc, etc,. Just be aware that these could leave you close to the threshold.


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    #3
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,279 Mod ✭✭✭✭The_Conductor


    Eurorunner wrote: »
    As long as you come in below the €10k, theres no problem. You need to declare this in your tax return (even though its below the 10k) each year.

    Only thing to watch is that people can claim for rent + bills that you charge them for eg. esb, bins, phone, etc, etc,. Just be aware that these could leave you close to the threshold.

    Correct- absolutely all income from the person staying in the house counts towards the 10k limit- billshares for ESB, NTL etc- all count. Make sure that you keep track and declare all the income- as Revenue have been having a crack down...... Also- to avail of this scheme the house has to be your permanent residence.......


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    #4
    Ginger83
    Registered Users Posts: 3,461 ✭✭✭Ginger83


    Thanks guys, would the tenants pay be taken into consideration?
    Would i need to worry about that or just the amount of rent relief added to the figure i receive doesnt hit the 10k mark?
    Thanks again.


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    #5
    Eurorunner
    Closed Accounts Posts: 2,393 ✭✭✭Eurorunner


    Ginger83 wrote: »
    Thanks guys, would the tenants pay be taken into consideration?
    Is not relevant.
    Ginger83 wrote: »
    Would i need to worry about that or just the amount of rent relief added to the figure i receive doesnt hit the 10k mark?
    Stay under the 10k, file annual tax returns and declare rental income and make sure property continues to be your principal residence so long as you avail of 'rent-a-room' scheme...


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    #6
    Ginger83
    Registered Users Posts: 3,461 ✭✭✭Ginger83


    Thanks again
    One more question?
    As I have not made tax returns before I'm a PAYE worker, do I need to include my own earnings in the tax return?


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    #7
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,279 Mod ✭✭✭✭The_Conductor


    Ginger83 wrote: »
    Thanks again
    One more question?
    As I have not made tax returns before I'm a PAYE worker, do I need to include my own earnings in the tax return?

    Yes- you do. Its not that difficult. If you ring Revenue they have an interesting little brochure on tax credits- you may be in for a very pleasant surprise when you go to do your tax return.......


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