Rental Income

SadieMae

Hi All, myself and my husband are 'accidental landlords'. I had an apartment when we met. I moved in with my now husband and the apartment was rented. Our tenants have recently moved out after 5 years. The apartment was in a state and it cost us a lot of money to get it back to a fit state. We would like to let my husbands sister move in for a year. She is saving for a house and so we don't want to charge her rent. Are there any tax implications for either my husbands sister or us?

Thanks!!!!

Lockedout2

The free use of property is a gift and subject to CAT so the amount of rent foregone BUT there is an annual gift exemption of €3,000 per person so that €6,000 from yourself and your husband.
Is she married then its another €6,000 for him.

You can't claim interest relief while the property is being occupied rent free.

SadieMae

Hi Lockedout2

Thanks so much for the info. She has a partner that will be moving in with her, does it make a difference if they are not married, can we still claim the gift exemption for both 2 x €6,000 = €12,000 annually? You say the gift is subject to CAT, what is CAT?

Thanks again, we don't want to end up with a tax bill at the end of the year!!

Sadiemae

Lockedout2

Yes €12000.

CAT capital acquisitions tax - Tax on gifts.

Hollister11

Would you not charge rent of like 100 a month. The there's no gift, just a cheap house.

Lockedout2

Hollister11 wrote: »

Would you not charge rent of like 100 a month. The there's no gift, just a cheap house.

Unless the market rent is €100 per month then there is a gift!!