Rent Supplement in a Rented room house

sailing

Hi,

I was wondering if anyone would be able to help me. I currently rent a room out in my house to a couple. Recently one of them has returned to full time education and the other is now unemployed. The unemployed tenant is now applying for rent supplement. The form that she produced is quite detailed. The room is rented out for very little and I'm in a position wherby if I am wondering if it will have an impact on my mortgage interest relief that I receive due to buying at the height of the boom. The form dosen't give the option of saying it is a house share. Financially I would be better off not renting the room out if it means I lose any of this mortgage relief as the room is rented out at a very low rate. It's a difficult situation as they are renting the room out as a married couple yet only one is looking for mortgage relief. Any advise would be appreciated

Many thanks.

snubbleste

If one of the couple is working, I can't see the eligibilty for rent supplement.
It won't affect your MIR based on the info you provided.

sailing

Thanks for the reply. No, one of them is unemployed and the other was employed up until a few months ago and is now back in full time education after being made redundant. So in effect neither are working. I'm just concerned that I will be forced into losing my mortgage interest relief. The form she produced is quite detailed and looks for my PPS number, salary, insurance details etc which I have no problem giving if it has no effect on my own relief. If it does I'll be forced into not renting the room out. They have been good tenants so I am reluctant to go down that road although they are a home owner in another country which they have rented out and are making a nice profit off which sort of irks me a little when I am making next to nothing on the room myself as it's very keenly priced and am a little surprised by her looking for rent supplement.

digzy

afaik you can take in up to 10k per annum on the rent a room scheme. It's important to declare this to the revenue. I'd a lady who was renting a room from me a few years back and she produced one of these. I filled it out but we never heard anything back.

Like you I was surprised. I dont think the rent supplement pays for rooms more like stand alone accommodation.

djimi

I would have thought your first call for concerns of this nature should be to the bank/mortgage lender? They will tell you exactly where you stand.

Mrs OBumble

digzy wrote: »

I dont think the rent supplement pays for rooms more like stand alone accommodation.

I'm sure it does, but the rent-cap is lower in shared accommodation than in non-shared.

Re the post immediately above this - OP, do you usually go to your bank for tax-advice? .... no, neither do it. Either hope that someone here knows, or visit the revenue site for a read yourself. I don't know about this issue, but would be surprised if getting some RA has any effect on it.

odds_on

I would be fairly certain as the property is still your Principal Private Residence and you are renting a room to licensees/lodgers, there should be no problem.

The problem arises when you rent out the whole property and move to another property yourself. In many mortgage contracts there are clauses prohibiting rent out the property without prior written permission from the mortgagor as tenants have very many rights to remain in a property once they have been residing there for more than 4 months.

However, licensees/lodgers have very few rights law and you may ask them to leave at any time.

Marcusm

djimi wrote: »

I would have thought your first call for concerns of this nature should be to the bank/mortgage lender? They will tell you exactly where you stand.

I wouldn't be taking tax advice from the bank!

riclad

Look on revenue ie ,rent a room scheme , up to 10 k you pay no tax, You don,t need to register with prtb.
my friend has two tenants , claims trs tax credits.
he filled in forms for 2 rent allowance tenants,in the last 4 years.
it has no impact on his tax .HE makes tax return as a taxi driver, puts down two tenants ,on rent a room scheme ,rental income 8k per year.
he got trs refund 3k 2 years ago ,as he didnt claim it for 4 years.he showed me his tax return,
he also submits it thru an accountant,as he,s self employed.
i ,m sure filling in the form re rent allowance will have no effect on your tax status or trs credits.

he declares all income, has rent books,etc
he pays tax on his income as a driver,
ie his rent a room income is under 10k,
no tax due on it.

tHE WELFARE officer comes out, talks to tenant
for 3 or 4 minutes,
its just to verify he,s living at this adress.
This is not an inspection.its a formality.
ITS likely she may not give advance notice
,ie she may not say ill call out monday,
she,ll likely call within 2 weeks of recieving ra application,after 10 am, before 5,pm,weekday,
most likely after 1pm.

I ASSURE you it has no effect on your tax relief,
i think you should make a tax return,
eg rental income x amount ,put in note ,this is rent a room scheme ,i have 2 tenants.
your tenant is entitled to tax credits on rental expenses,if working.
You only get trs for 7 years max.
he tells me, i paid x amount tax last year,
since its under ten k it has no effect on his tax bill.
they want to encourage live in, landlords, to rent to


single people, thats why rent a room exists.
You,d get better advice from centrecare,threshold re ra tax info,
or just look on www.revenue.ie rent a room