Rent a room questions

cronos

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Marcusm

cronos wrote: »

I'm considering the purchase of a house and then to support paying the mortgage renting 3-bed rooms. It's a 4-bed house. I'm aware of the 12k rent a room relief on rent. I'm a little confused on what else is tax deductible etc... Anyone familiar with the scheme. Feel free to PM if your familiar:).

http://www.revenue.ie/en/tax/it/leaflets/it70.html#section4

If you receive less than the stated amount per annum in aggregate for rent and bill from the 3 tenants then you will not have any tax to pay. If you receive more than that amount in aggregate then you will have to pay tax on the FULL amount of your rental profit.

L1011

Banks do not take rent a room income in to account for mortgage calculations anymore so you'll need to be able to support the mortgage in full from existing income

cronos

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L1011

cronos wrote: »

Is a car parking space counted against the rent a room. Seems like they are seperate payments.

It would probably - seek tax advise here - be considered a bill and have to come in under the 12k total. As said above - if you get 12,001 in a year you have to pay tax on the entire lot.

cronos

L1011 wrote: »

It would probably - seek tax advise here - be considered a bill and have to come in under the 12k total. As said above - if you get 12,001 in a year you have to pay tax on the entire lot.

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L1011

cronos wrote: »

Fair enough. Just means I'll leave a room free and end up charging the remaining renters more. Silly really. Will just make the rental market situation in Dublin worse.

The number of people in your situation (if you can actually fund the mortgage without the rental income - the banks will not and can not take a cent of it in to account) is likely in double figures, if even. It has a negligible impact if any.

The 12k is very generous compared to international equivalents.

athtrasna

cronos wrote: »

Fair enough. Just means I'll leave a room free and end up charging the remaining renters more. Silly really. Will just make the rental market situation in Dublin worse.

Not silly at all. The threshold was increased to 12k from 10.5k in an attempt to make it more attractive, and as mentioned already, it's generous compared to international standards. And it is aiding the rental market hugely.

Suspect it's being widely abused too judging by some of the posts on here over the years.

cronos

athtrasna wrote: »

Not silly at all. The threshold was increased to 12k from 10.5k in an attempt to make it more attractive, and as mentioned already, it's generous compared to international standards. And it is aiding the rental market hugely.

Suspect it's being widely abused too judging by some of the posts on here over the years.

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athtrasna

cronos wrote: »

I meant depending on where you live renting a third room just does not make sense if it brings you over the 12k mark, as you get taxed for all the money, not just the money in excess of 12k. Thus it makes more sense to push higher rents on 2 rooms and get the 12k, rather than charge less per room but rent 3 of them and get say 13k. Anyway does not matter. The rule is the rule.

Chances are people would be willing to pay more to share facilities with fewer people anyway as well as it being unlikely that the three other rooms are the same size. You're better off maximising the income from two rooms rather than three IMO.

Pawwed Rig

Rent will be market driven. It is not something you can raise or drop on a whim.
Why not rent a room the first 2 rooms and airbnb the other room?

cronos

athtrasna wrote: »

Chances are people would be willing to pay more to share facilities with fewer people anyway as well as it being unlikely that the three other rooms are the same size. You're better off maximising the income from two rooms rather than three IMO.

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cronos

Pawwed Rig wrote: »

Rent will be market driven. It is not something you can raise or drop on a whim.
Why not rent a room the first 2 rooms and airbnb the other room?

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Grolschevik

cronos wrote:

Fair enough. Just means I'll leave a room free and end up charging the remaining renters more. Silly really. Will just make the rental market situation in Dublin worse.

cronos wrote:

I agree and that's also my point. It means i will have another room I could rent out that I won't, which means higher rent for the other two rooms and 1 less room for the rental market. Anyway my question is answered.

Nothing stopping you renting all three out for just less than 12k between them if you feel so strongly about the state of the rental market.

Although, with respect, it sounds like you were hoping someone would say to you "oh, of course you can rent out three rooms for more than 12k, as long as it's altruistically done in the interests of the rental market!"

cronos

Grolschevik wrote: »

Nothing stopping you renting all three out for just less than 12k between them if you feel so strongly about the state of the rental market.

Goodluck