Renting Out To Family Member

cppbutler

Hi just looking for a bit of advice,

At the moment myself, the wife and my son (early 20's) live in our family home. Ever since my eldest daughter left the home and my son was soon to be moving out we have been thinking about selling.

My wife wants to see what it's like to live in an apartment for a year so we will be renting one soon, but our son has made us an offer to "rent" the house to him for maybe or year(probably less) along with his girlfriend and one of his friends in the other room.

They said they'd basically pay whatever our rent is for the apartment in exchange for them staying there as a straight swap. If I was the rent out properly to tenants I'd make a lot more money from it but this is just a year to benefit everyone and help him and his girlfriend and friend out.

Is there any tax implications of this? Do I need to register? Or is it fine to have them stay there "unofficially" if that makes sense?

Any info would be great,

thanks

handlemaster

i can see another post in a few months ..sons friend refuses to pay rent /damages. sell or rent for full value save you family hassle in the long term

The_Morrigan

You aren't renting to a family member. You are renting to a family member and two other people.

Go the proper legal route here, otherwise it will end in tears when they or you try to exercise your rights.

Marcusm

Firstly, you'll pay tax on the rent you receive without any offset for the rent you pay. Given the short lived nature of the arrangement, you might want to think about whether it's not better leaving it empty.

Mrs OBumble

I agree with getting professional advice.

But before you do, ask yourself this question: what would you do if your son stopped paying the rent? Are you willing to either take the hit or kick him out? If not, then stop considering this option now.

cppbutler

Hi thanks for everyones replies.

I have absolutely no doubt about the people that are going to move in. I trust my son and his girlfriend 100% and his friend that wants to move in too I've know myself for over 15 years so I'm still pretty happy to go ahead with this.

I own the house outright and I've switched our electricity to pre paid which my son will take over along with greyhound card for bins etc.

Mainly wanted to clear up legalities of the situation rather than being told not to go ahead with it.

cppbutler

Hi thanks for everyones replies.

I have absolutely no doubt about the people that are going to move in. I trust my son and his girlfriend 100% and his friend that wants to move in too I've know myself for over 15 years so I'm still pretty happy to go ahead with this.

They're all working professionals and have full time jobs, they're not teenagers.

I own the house outright and I've switched our electricity to pre paid which my son will take over along with greyhound card for bins etc.

Mainly wanted to clear up legalities of the situation rather than being told not to go ahead with it.

shenanagans

Change your insurance to rental property & add public liability in case of any issues.

MouseTail

No mortgage means you have no interest to offset against tax, which means that your rental income should be pitched a fair bit above your apartment rental price if you want to cover that.

power101

cppbutler wrote: »

Hi thanks for everyones replies.

I have absolutely no doubt about the people that are going to move in. I trust my son and his girlfriend 100% and his friend that wants to move in too I've know myself for over 15 years so I'm still pretty happy to go ahead with this.

They're all working professionals and have full time jobs, they're not teenagers.

I own the house outright and I've switched our electricity to pre paid which my son will take over along with greyhound card for bins etc.

Mainly wanted to clear up legalities of the situation rather than being told not to go ahead with it.

Do you mean a prepaid meter?? This is very expensive, will cost 30% more than a normal 12 month fixed deal.

cppbutler

power101 wrote: »

Do you mean a prepaid meter?? This is very expensive, will cost 30% more than a normal 12 month fixed deal.

Yes, well we've switched months ago. I've found I'm saving 10-20 euro than what I normally paid per month so I'm happy with it.
It's probably down to being more aware of what we're spending and using but if it works it works.