House Extension and renting the new room

konline

Looking for some information. I have extended my house and got one new bedroom which is self-contained and could be rented.
Does anyone know if I have to register in (P)RTB if I want to rent it? If yes, is it an easy process?
Does it fall under 'Rent-a-Room' scheme?

Thank you in advance.

theboringfox

konline wrote: »

Looking for some information. I have extended my house and got one new bedroom which is self-contained and could be rented.
Does anyone know if I have to register in (P)RTB if I want to rent it? If yes, is it an easy process?
Does it fall under 'Rent-a-Room' scheme?

Thank you in advance.

It falls under rent a room and no requirement to register with PRTB.

konline

theboringfox wrote: »

It falls under rent a room and no requirement to register with PRTB.

Thank you for your quick response.
One of the potential tenant is asking me to register in RTB. Do you know it will be ok if I go and register in RTB?

pilly

Is the bedroom accessible from the house?

Lantus

konline wrote:

Looking for some information. I have extended my house and got one new bedroom which is self-contained and could be rented. Does anyone know if I have to register in (P)RTB if I want to rent it? If yes, is it an easy process? Does it fall under 'Rent-a-Room' scheme?

Self contained implies it has a separate entrance and cannot be accessed from the main house so would also have a bathroom and kitchen?

If it's just a room you walk to from the main house then it's just a room and any tenant would be a licensee. No rtb registration required.

4ensic15

If it is a self contained flat, it must be registered. there is provision to opt out of the notice provisions of the RTA but this must be done at the start of the tenancy. If it is under the same roof as the main house it may qualify for the Rent a room relief scheme.

konline

Lantus wrote:

Self contained implies it has a separate entrance and cannot be accessed from the main house so would also have a bathroom and kitchen?

Thank you all for your responses.

Yes it has separate entrance, bed, kitchen and bathroom but it's under one roof.
Will there be any tax for me or will it fall under rent-a-room scheme?

Baby01032012

konline wrote: »

Thank you all for your responses.

Yes it has separate entrance, bed, kitchen and bathroom but it's under one roof.
Will there be any tax for me or will it fall under rent-a-room scheme?

If you have no direct access to the property from your main house it won't qualify for RARR and will be a normal tenancy and must be registered with RTB and included in your tax return

It definitely falls under the rent a room scheme once there is a door from your house to the room and the rent is under 14k per year. The person living there should also be a licensee once you maintain access to that part of the house. The separate entrance does not disqualify the room from rent a room or that the person should automatically get tenants right.

My advice would be steer well clear of the person asking for you to register with the RTB as they should like someone who could potentially be trouble. I would not be allowing a person living in my house to get any rights.

I would advertise it as a room for rent and the house has a second kitchen and a second living room which you "rarely use" but would still have the right to access and use at anytime.

pilly

konline wrote: »

Thank you all for your responses.

Yes it has separate entrance, bed, kitchen and bathroom but it's under one roof.
Will there be any tax for me or will it fall under rent-a-room scheme?

Can it be accessed from the house? That's the main question you have to answer.

If it can then it comes under RARR, if it can't then it's a separate tenancy.

handlemaster

OP. Potential tenants telling you to register avoid like the plague. The demands will not end there

Graham

handlemaster wrote: »

OP. Potential tenants telling you to register avoid like the plague. The demands will not end there

The potential tenants may be enlightening the landlord as to his legal obligations, I'm not convinced that's necessarily cause for avoidance.

It's probably sensible for the landlord to clarify his legal position with regards to RTB registration now, before seeking out a tenant that isn't (yet) aware of their rights under the RTA.

konline

pilly wrote: »

Can it be accessed from the house? That's the main question you have to answer.

If it can then it comes under RARR, if it can't then it's a separate tenancy.

Yes, it can be accessed from my house. I have to step in to my garden to enter in to the new room and kitchen. New room and kitchen is in the garden extension sharing the wall of my kitchen.
Does it answer your question? Thank you very much.

Graham

konline wrote: »

Yes, it can be accessed from my house. I have to step in to my garden to enter in to the new room and kitchen. New room and kitchen is in the garden extension sharing the wall of my kitchen.
Does it answer your question? Thank you very much.

Can you step from your house to the extension without going outside?

pilly

konline wrote: »

Yes, it can be accessed from my house. I have to step in to my garden to enter in to the new room and kitchen. New room and kitchen is in the garden extension sharing the wall of my kitchen.
Does it answer your question? Thank you very much.

Yes, it does answer the question. Unfortunately it's not a good answer for you. This is not simply a room in your house.

It's self contained and therefore has to be registered as a tenancy.

Lantus

konline wrote:

Yes it has separate entrance, bed, kitchen and bathroom but it's under one roof. Will there be any tax for me or will it fall under rent-a-room scheme?

Is the entrance internal or external?

Sleeper12

konline wrote:

Yes, it can be accessed from my house. I have to step in to my garden to enter in to the new room and kitchen. New room and kitchen is in the garden extension sharing the wall of my kitchen. Does it answer your question? Thank you very much.

Put a door from your kitchen into the flat. The door can stay locked. It's a small cost for the door but will save 1000s per per year in tax

pilly

Sleeper12 wrote: »

Put a door from your kitchen into the flat. The door can stay locked. It's a small cost for the door but will save 1000s per per year in tax

Not alone the hassle it will save. May not be possible if the adjoining wall is where all the kitchen units etc. are though.

irishbigfoot

OP- have a look at Citizens Information for some details...especially:


Self-contained units
If you rent out a self-contained unit in your home, such as a converted garage attached to your home or a basement flat, the rights and obligations under residential tenancies legislation apply to you. For example, you are obliged to register the tenancy with the Residential Tenancies Board (RTB), provide a rent book to the tenant and ensure that the accommodation provided meets minimum physical standards.

The residential tenancies legislation provides for security of tenure for tenants. These provisions are in Part 4 of the Residential Tenancies Act 2004. However, if the self-contained flat or apartment was originally part of the main house, you can choose to opt out of these provisions. This option is available under Section 25 of the Act. You must give the tenant notice in writing, before the start of the tenancy, if you wish to take this option.

Rooms that are not self-contained
If the part of your home that you rent out is not self-contained, you are not covered by landlord and tenant legislation, so the rights and obligations under that legislation do not apply to you. For example, you are not obliged to register as a landlord with the RTB, provide a rent book to the tenant or ensure that the accommodation provided meets any minimum physical standards.

This also means that private tenants living in your home are living under a licensee agreement, not a tenancy agreement, and are really only entitled to reasonable notice if you choose to terminate the agreement. Tenants are, however, entitled to refer disputes to the Small Claims Court.

Common claims that are heard by the Small Claims Court include disputes about retention of a tenant's deposit for what they consider unfair reasons, or deductions from rent for damage to property that is over and above normal 'wear and tear'.

Your tenants can find out more about their rights in our document Sharing accommodation with your landlord and can also contact Threshold for advice– see 'Where to apply' below.

konline

Graham wrote: »

Can you step from your house to the extension without going outside?

Yes, I go to my garden and then open the door of the new room. I don't need to go out of my house.

pilly

konline wrote: »

Yes, I go to my garden and then open the door of the new room. I don't need to go out of my house.

You're not making sense or your deliberately trying to be obtuse. If you go to your garden then you've gone out of your house???

Graham

konline wrote: »

Yes, I go to my garden and then open the door of the new room. I don't need to go out of my house.

You either have an indoor garden or you're stepping outside.

konline

Graham wrote: »

You either have an indoor garden or you're stepping outside.

Sorry, got it, this is new to me. Thank you very much.

Claw Hammer

The rent a room scheme is operated by the Revenue Commissioners. They have a policy with regard to what they will accept for the purpose of tax relief.
The status of the occupants is entirely different matter. It does not matter whether you are availing of the rent a room tax relief are not, the occupants may well be tenants and registration may be required. It is not the case that if you are in one you are automatically out of the other. There is a specific section in the Residential Tenancies Act dealing with multiunit dwellings where the landlord occupies one unit.
It simply allows the landlord to act out some of the notice provisions. Registration of the other hassles apply. If it has a separate kitchen et cetera you will not be deemed to be living in the unit and the occupants will not be licensees. The question of access doors is irrelevant.

Gumbo

Sounds like a granny flat without the internal connection.
Have you got planning permission for this OP?

RTB required and full tax liability based on what you have said so far.

Claw Hammer

Claw Hammer wrote: »

The rent a room scheme is operated by the Revenue Commissioners. They have a policy with regard to what they will accept for the purpose of tax relief.
The status of the occupants is entirely different matter. It does not matter whether you are availing of the rent a room tax relief are not, the occupants may well be tenants and registration may be required. It is not the case that if you are in one you are automatically out of the other. There is a specific section in the Residential Tenancies Act dealing with multiunit dwellings where the landlord occupies one unit.
It simply allows the landlord to act out some of the notice provisions. Registration of the other hassles apply. If it has a separate kitchen et cetera you will not be deemed to be living in the unit and the occupants will not be licensees. The question of access doors is irrelevant.

The person renting the unit will need to have exclusive use in order to make any attempt at claiming rights and I would personally not allow this to occur, you would be insane to let someone even think they could get rights of occupation of a part of your home. I really can't see how its justified giving tenancy rights to a person renting a granny flat, its no different to renting a room imo and there is no way they should be anything other than a licensee.

Essentially a person living in your home who can't be kicked out

I'd either be getting the person to opt out of it being a tenancy from the start (which in this type of scenario is possible) or else I'd be using the kitchen and/or living room in the granny flat every now and then in order to keep it as part of the main house and thus guaranteeing the person living there is a licensee (in other words the access door is very much relevant. Its also extremely relevant to enable the op claim rent a room relief.

Graham

Teagan Bumpy Greens wrote: »

I really can't see how its justified giving tenancy rights to a person renting a granny flat, its no different to renting a room imo and there is no way they should be anything other than a licensee.

I can see the other side of the argument too.

If you're hoping to charge a premium for a 'self contained apartment' over the usual rent for a single room. Simultaneously trying to claim the benefits of a room rental strikes me as a bit 'I'd like to have my cake and eat it'.

Graham

Graham wrote: »

I can see the other side of the argument too.

If you're hoping to charge a premium for a 'self contained apartment' over the usual rent for a single room. Simultaneously trying to claim the benefits of a room rental strikes me as a bit 'I'd like to have my cake and eat it'.

You should be having your cake and eating it though in this scenario, I don't see why you shouldn't.

The person is still paying much less than in a one bed apartment and they are under the home owners roof, why should they get any rights. They also most likely share a gas, electricity and broadband connection which again is just not compatible with them attaining rights when they are sharing bills with the home owner.

Graham

Teagan Bumpy Greens wrote: »

You should be having your cake and eating it though in this scenario, I don't see why you shouldn't.

The person is still paying much less than in a one bed apartment and they are under the home owners roof, why should they get any rights. They also most likely share a gas, electricity and broadband connection which again is just not compatible with them attaining rights when they are sharing bills with the home owner.

Tax breaks for flouting planning restrictions, interesting thought.

Landlords charging 70% - 90% of the rent for what equates to 40% of an apartment.

NB: generalising here. Not accusing the OP of flouting any regulations.

I was only admiring a Daft Ad for a converted single garage self-contained studio this morning, €675 a month. Another for €850 with special mention that it's not a tenancy but will be a 1 year lease???

Graham

Graham wrote: »

Tax breaks for flouting planning restrictions, interesting thought.

Flouting what planning laws (once there is a connecting door)?

Graham

Teagan Bumpy Greens wrote: »

Flouting what planning laws (once there is a connecting door)?

It's not unusual for permission for 'granny-flats' to stipulate they cannot be rented as a separate dwelling.

Self-contained suggests a property is being let as a separate dwelling.

Graham

Graham wrote: »

It's not unusual for permission for 'granny-flats' to stipulate they cannot be rented as a separate dwelling.

Self-contained suggests a property is being let as a separate dwelling.

How can a a room under the same roof with an internal door be considered a separate dwelling, it makes no sense.

As I said rent it as a room, tell the licensee that they will "more or less" have full use of the living room and kitchen on that side of the house but not exclusive, set the rent at what you want and if someone takes it then they are happy with the scenario.

Also if it's a shared esb and gas connection I find it very hard to see how it can be considered a seperate dwelling.

konline

Hmm, thank you all for sharing your views. Provision for a door to the extension is there but i sealed it off. I can open it anytime. So let me ask the builder again.
Any way thanks for all your valuable input.

Graham

Teagan Bumpy Greens wrote: »

How can a a room under the same roof with an internal door be considered a separate dwelling, it makes no sense.

As I said rent it as a room, tell the licensee that they will "more or less" have full use of the living room and kitchen on that side of the house but not exclusive, set the rent at what you want and if someone takes it then they are happy with the scenario.

Also if it's a shared esb and gas connection I find it very hard to see how it can be considered a seperate dwelling.

I find the easiest way to judge is to read the property description. The presence of the phrase 'self-contained' is usually the giveaway.

The_Conductor

OP- do whatever you have to do to put a connecting door from your kitchen (or whatever room is adjacent to the extension)- in asap.
Without a connecting door- the rental income is taxable.
With a connecting door- you have 14k tax free under the rent-a-room scheme.
Its a no-brainer- put the damn door in.
Your stepping into your garden to get to the room- means it is considered to be self contained- once it has this 'self contained' tag without a connecting door- its a rental property like any other rental property. The fact that its under the one roof- is wholly irrelevant- and a complete and utter red herring.

Go, find a builder- and get a door put in. Don't think of letting the unit until you do this- or you'll be in the RTB tribunal process from a tenant or prospective tenant, for the foreseeable future.

Use a proper builder for crying out loud- you don't want to cause structural issues either.

Browney7

This thread could have saved the OP thousands - move to Bargain Alerts?

konline

So all the garage conversions we see which are being rented will not fall under rent a room scheme, because landlord has to step out to access it?
Revenue/RTB website doesn't say this.

Gumbo

konline wrote: »

So all the garage conversions we see which are being rented will not fall under rent a room scheme, because landlord has to step out to access it?
Revenue/RTB website doesn't say this.

You haven't carried out a garage conversion. You've carried out and created a self contained flat.

If Building Control were to get wind of it, they could chase you for a fire safety certificate and a disabled access certificate.

Cakerbaker

konline wrote: »

So all the garage conversions we see which are being rented will not fall under rent a room scheme, because landlord has to step out to access it?
Revenue/RTB website doesn't say this.

Citizens information says garage conversions fall under the RTB.

davindub

konline wrote: »

So all the garage conversions we see which are being rented will not fall under rent a room scheme, because landlord has to step out to access it?
Revenue/RTB website doesn't say this.

Garage conversion accepted to the RTB
https://www.rtb.ie/archive/2010%20Disputes/Tribunals%202010/TR163.DR224.2010/Tribunal%20Report.pdf

Rent a room relief is not based on the RTB rules. Revenue have their own criteria for the relief. But one of them is that if the property is detached from the main residence, the relief doesn't apply.

relax carry on

Rent a room tax relief qualifying properties description:

What type of residence qualifies?
Sole or main residence
Your main residence is your home for most of the year and where friends would expect to find you. You do not have to own the property to claim relief.

The room or rooms must be in a residential property that is located in Ireland. You must use it as your main residence during the tax year.

Self-contained unit
The rented room or rooms can be a self-contained unit within the house, such as a basement flat or a converted garage. If this unit is not attached to the property it cannot qualify for the relief.

Business use or guest accommodation
Your tenants must use the room on a long-term basis. You cannot claim relief on rooms that are used for business purposes.

Short-term stays provided through bed and breakfasts, a guesthouse or online booking sites do not qualify for relief.

http://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/land-and-property/rent-a-room-relief/what-type-of-residence-qualifies.aspx

Claw Hammer

The_Conductor wrote: »

OP- do whatever you have to do to put a connecting door from your kitchen (or whatever room is adjacent to the extension)- in asap.
Without a connecting door- the rental income is taxable.
With a connecting door- you have 14k tax free under the rent-a-room scheme.
Its a no-brainer- put the damn door in.
Your stepping into your garden to get to the room- means it is considered to be self contained- once it has this 'self contained' tag without a connecting door- its a rental property like any other rental property. The fact that its under the one roof- is wholly irrelevant- and a complete and utter red herring.

Go, find a builder- and get a door put in. Don't think of letting the unit until you do this- or you'll be in the RTB tribunal process from a tenant or prospective tenant, for the foreseeable future.

Use a proper builder for crying out loud- you don't want to cause structural issues either.

The connecting door is not necessary for taxation purposes. There is often no connecting door to a basement flat for example.

Gumbo

Claw Hammer wrote: »

The connecting door is not necessary for taxation purposes. There is often no connecting door to a basement flat for example.

But a basement flat will usually be in compliance with the planning, fire cert etc

Michael D Not Higgins

4ensic15 wrote: »

If it is a self contained flat, it must be registered. there is provision to opt out of the notice provisions of the RTA but this must be done at the start of the tenancy. If it is under the same roof as the main house it may qualify for the Rent a room relief scheme.

You can only opt out of Part 4 if the self contained part is part of the original build of the property, as per Section 25 (2) (b) of RTA 2004.

Claw Hammer

kceire wrote: »

But a basement flat will usually be in compliance with the planning, fire cert etc

The Revenue are not interested in planning or fire safety. They allow relief according to their own criteria which does not involve checking fire of planning. they assume rightly or wrongly that the local authority will deal with those matters and there will be no letting at all to qualify for tax relief if the local authority do their job properly.

Michael D Not Higgins

Claw Hammer wrote: »

The connecting door is not necessary for taxation purposes. There is often no connecting door to a basement flat for example.

I'm not sure of the interpretation for basements for example but it may be true for some instances where the self contained part is part of the original build.

I have very little faith in anyone arguing with Revenue over a new build onto the side/back of a house which is self contained as being part of the main residence.

Michael D Not Higgins

Claw Hammer wrote: »

The Revenue are not interested in planning or fire safety. They allow relief according to their own criteria which does not involve checking fire of planning. they assume rightly or wrongly that the local authority will deal with those matters and there will be no letting at all to qualify for tax relief if the local authority do their job properly.

There are a number of things here.

Firstly, does it have planning permission? Planning enforcement can force rectification works or orders to prevent renting of non compliant builds.

Secondly, does it qualify for tax relief? Without being part of the main residence, no it doesn't. As above, the accepted way of demonstrating it as part of the main residence is that it's accessible from within the main residence.

Thirdly, what status is it for tenancy? Self contained, it's a tenancy. Connected internally, it's a licence.

Claw Hammer

Claw Hammer wrote: »

The rent a room scheme is operated by the Revenue Commissioners. They have a policy with regard to what they will accept for the purpose of tax relief.
The status of the occupants is entirely different matter. It does not matter whether you are availing of the rent a room tax relief are not, the occupants may well be tenants and registration may be required. It is not the case that if you are in one you are automatically out of the other. There is a specific section in the Residential Tenancies Act dealing with multiunit dwellings where the landlord occupies one unit.
It simply allows the landlord to act out some of the notice provisions. Registration of the other hassles apply. If it has a separate kitchen et cetera you will not be deemed to be living in the unit and the occupants will not be licensees. The question of access doors is irrelevant.

Indeed, you can avail of the rent a room scheme from an income tax point of view "For 2017, the total (gross) rent that you get, which includes sums that the tenant pays for food, utilities, laundry or similar goods and services, cannot exceed €14,000 in the tax year (1 January to 31 December) – see ‘Exclusions from rent-a-room relief’ below"
................ while the rights and obligations under residential tenancies legislation apply to you as it's a Self-contained unit


The below seems to be the status quo on here...........

Michael D Not Higgins wrote: »

...............

Secondly, does it qualify for tax relief? Without being part of the main residence, no it doesn't. As above, the accepted way of demonstrating it as part of the main residence is that it's accessible from within the main residence............

.

Graham wrote: »

.....

Self-contained suggests a property is being let as a separate dwelling.

The_Conductor wrote: »

...........
Your stepping into your garden to get to the room- means it is considered to be self contained- once it has this 'self contained' tag without a connecting door- its a rental property like any other rental property. The fact that its under the one roof- is wholly irrelevant- and a complete and utter red herring..........

............. incorrect IMO


http://www.citizensinformation.ie/en/housing/owning_a_home/home_owners/rent_a_room_scheme.html

".....A self-contained unit, such as a basement flat or a converted garage attached to your home, can qualify for this relief" ............ the such as are two examples, not a full list of what is allowed.


There is undoubtedly a source of confusion.........PRTB view such tenants in granny flats as tenants with associated rights, rather than licencees under Rent a Room. Revenue guidelines allow the income folks in self contained units to qualify under rent a room relief.

Michael D Not Higgins

Augeo wrote: »

............. incorrect IMO


http://www.citizensinformation.ie/en/housing/owning_a_home/home_owners/rent_a_room_scheme.html

".....A self-contained unit, such as a basement flat or a converted garage attached to your home, can qualify for this relief" ............ the such as are two examples, not a full list of what is allowed.

This says it can qualify for relief not necessarily that it will. The relevant legislation is the TCA 1997 as amended which requires the qualifying residence to be the residential premises of the individual in which the room or rooms are rented. The residential premises is a building or part of a building used as a dwelling.

Note the use of a singular dwelling. You cannot have a separate dwelling qualify for rent a room relief. There may be an argument for non-connected self contained parts such as a basement flat if it's considered part of the original residential premises but I'm not sure what arguments Revenue accept on that behalf.

Claw Hammer

Michael D Not Higgins wrote: »

This says it can qualify for relief not necessarily that it will. The relevant legislation is the TCA 1997 as amended which requires the qualifying residence to be the residential premises of the individual in which the room or rooms are rented. The residential premises is a building or part of a building used as a dwelling.

Note the use of a singular dwelling. You cannot have a separate dwelling qualify for rent a room relief. There may be an argument for non-connected self contained parts such as a basement flat if it's considered part of the original residential premises but I'm not sure what arguments Revenue accept on that behalf.

The Revenue operate an "under the same roof" policy. I.E. The entire is within the same envelope. A unit such as a distinct mews will not be accepted.

Michael D Not Higgins

Michael D Not Higgins wrote: »

This says it can qualify for relief not necessarily that it will. The relevant legislation is the TCA 1997 as amended which requires the qualifying residence to be the residential premises of the individual in which the room or rooms are rented. The residential premises is a building or part of a building used as a dwelling.

Note the use of a singular dwelling. You cannot have a separate dwelling qualify for rent a room relief. There may be an argument for non-connected self contained parts such as a basement flat if it's considered part of the original residential premises but I'm not sure what arguments Revenue accept on that behalf.

A self contained unit which is an extension onto a residence is undoubtedly part of that residence. The address is the same. It's covered under the property tax etc...... it's part of the residential premises of the owner.

No one is trying to palm off a semi d here.