Rent A Room Scheme Questions

Calltocall

Hi Folks

I have some questions re Rent A Room Scheme as I’m considering renting out a room

1. Do you draw up a contract for tenant to sign?

2. Where is the best place online to source a tenant?

3. Is it a good/bad idea, all thoughts welcome

4. What is the standard notice period applied if things don’t work out, is it four weeks?

It looks to be a good Scheme on paper but I’m wary of a stranger living in my home so I think point 2 is most important to me as to where best place to source reputable tenants.

Thanks for any input

mrslancaster

Friends who live near a third level college in Dublin rent-a-room to students. Afaik, they contacted the college but I don't know exactly how that works. They've had no problems. The students they had were from outside Dublin, they regularly went home at weekends and they were only there for the academic year.
If you are located near a 3rd level college that might be an option for you.

angeline

First off, the person will not be your tenant but a lodger/licensee, so no contracts. See more on citizens info re the difference. I have my own house and like that was wary of renting to a stranger. Personally I used Daft but ignored most of the calls. Meet the person, find out if ye share interests such as no house parties, guests, do they smoke or drink, just try to get a good feel for the person. I did and it worked out so well. You could also target certain places of employment if that appealed to you as a lot of callers on Daft clearly hadn't even read my ad properly and were a bit frenzied about finding any place at all. But you spot the people who are hopefully a right fit.

Baby01032012

Licensee not a tenant

I’d recommend settling out house rules but not a tenancy agreement. If they pay by the month then I’d give a months notice. Although they have no rights.

Daft.ie put add for free in the sharing section. Don’t put your number. Create an email address just for this purpose. Ignore most emails and contact the ones you like.

I’d include bills in the amount of rent set. Don’t forget to declare on your tax return even though no tax is payable once total receipt is under 14k

1874

Baby01032012 wrote: »

Licensee not a tenant

I’d recommend settling out house rules but not a tenancy agreement. If they pay by the month then I’d give a months notice. Although they have no rights.

Daft.ie put add for free in the sharing section. Don’t put your number. Create an email address just for this purpose. Ignore most emails and contact the ones you like.

I’d include bills in the amount of rent set. Don’t forget to declare on your tax return even though no tax is payable once total receipt is under 14k

I wouldnt be inclined to include bills in the rent although I believe its better to call it lodgings), Ive seen a few official places that mention the total amount including bills has to be less that 14k, and this was discussed before and the end result was, no one could put forward any legislation which said this was so, it was very vague.
As someone who has rented and shared and let property, there is no basis for including bills in the total 14k. Id certainly take a set amount in advance for the bills when sharing, as I used to collect the bills when they arrived and I did not like chasing people for money.
When I was a landlord, I saw a guidelines leaflet from the local council, which they included things that were not in the part 4 tenancy act as requirements and which an informed landlord would know, on one occasion I responded to a number of statements by a council inspector who it seemed to me backed away when it was clear I had read the act and knew what was in it. I believe the whole 14k (but with bills included) is the same thing (no legislation to back the bills included part). IMO its a means to foist some measure of cost (room rental cost) control onto the market of an owner occupied home without actually doing anything.
If people were getting an all in figure, it would be very easy for them to jack up the heating or run electrical items they didnt need, and some people are like that and would do it. I had someone resentfully tell me they didnt like paying my mortgage even though they wanted to rent a room in my home, When you rent, you pay your share of the bills.

mrslancaster

Limits & info for rent a room scheme from revenue:
https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/land-and-property/rent-a-room-relief/what-conditions-must-be-met.aspx

1874

mrslancaster wrote: »

Limits & info for rent a room scheme from revenue:
https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/land-and-property/rent-a-room-relief/what-conditions-must-be-met.aspx

Says "Expenses include the maintenance of the room let" maintenance of a room let does not include heating or electric or bins or any utility.

If you can find that 14k+bills in legislation? an SI or an Act? then I'll accept that, if its written down in either of those, thats where it matters. Whats written down on a website doesn't count.

mrslancaster

Rent-a-room relief.

32.—(1) The Principal Act is amended in Chapter 1 of Part 7 by the insertion of the following after section 216:


“216A.—(1) In this section—


‘qualifying residence’, in relation to an individual for a year of assessment, means a residential premises situated in the State which is occupied by the individual as his or her sole or main residence during the year of assessment;


‘relevant sums’ means all sums arising in respect of the use for the purposes of residential accommodation, of a room or rooms in a qualifying residence and includes sums arising in respect of meals, cleaning, laundry and other similar goods and services which are incidentally supplied in connection with that use;


‘residential premises’ means a building or part of a building used as a dwelling.

http://www.irishstatutebook.ie/eli/2001/act/7/section/32/enacted/en/html#sec32


Afaik the bit about 'other goods and services' has been understood to include utilities. Maybe contact Revenue just to be sure as going over the €14k means a fair amount would be due in taxes

1874

thanks, saw it before, electricity, broadband and heating are not incidental costs, this sounds like it was written to protect people (students or people in a digs arrangement as who else gets meals or laundry provided or done?) from being bilked by being charged (overcharged) for incidental costs, such as toilet paper By someone unscrupulous who would try make money off things and insist someone pays, or some such similar item, in no way do any of those things, ie laundry cleaning or meals equate to electricity broadband or gas/heating. I've never had anyone question paying a share of a bill, many have kicked up a fuss over what they perceive as their share or delayed in paying, any case where someone gets all in is open to being taken advantage of, and it simply doesn't say utilities in there which are not incidental (almost an accidental or unexpected cost). Revenue or anyone could give their own opinion on it but it just doesnt say it's so.

Baby01032012

Well as it’s a revenue scheme it’s revenues opinion that counts.

And their opinion is that all monies received including for utilities count towards the 14,000 pa limit.

Claw Hammer

1874 wrote: »

thanks, saw it before, electricity, broadband and heating are not incidental costs, .

Have you any authority for this proposition or is it your own view? it seems to me they are incidental costs because liability for them only arises as a direct result of the rental of the room. Revenue check the total amount of money passing between the owner and the occupant. Over €14k tax due, below €14k, no tax due. Revenue do not want to find €15k was passed over but €1,200 is claimed to be dues to heat, light etc.
The ease or difficulty of collecting money for bills is not relevant to this issue. If you get more than €14k and some of that is due to utilities, and you argue the point, it could turn out to be a very expensive way of testing your theory.

davindub

Claw Hammer wrote: »

Have you any authority for this proposition or is it your own view? it seems to me they are incidental costs because liability for them only arises as a direct result of the rental of the room. Revenue check the total amount of money passing between the owner and the occupant. Over €14k tax due, below €14k, no tax due. Revenue do not want to find €15k was passed over but €1,200 is claimed to be dues to heat, light etc.
The ease or difficulty of collecting money for bills is not relevant to this issue. If you get more than €14k and some of that is due to utilities, and you argue the point, it could turn out to be a very expensive way of testing your theory.

Anyone doing Rent a room should definitely confirm with Revenue, they have a helpdesk and are helpful enough. It would equally be expensive not to collect bills due to being at the limit with rent only.

What most people are ignoring is the phrase "similar goods and services" in the legislation. If light heat is considered similar to "meals, cleaning, laundry" then it certainly poses a question as to what people think is not similar?

https://www.charteredaccountants.ie/taxsource/1997/en/act/pub/0039/sec0216A.html?AspxAutoDetectCookieSupport=1

mrslancaster

Minister gave this answer a while back:

Rent-a-Room relief

Under the ‘Rent a Room’ scheme provided for in section 216A of the TCA 1997 an individual who lets a room (or rooms) in his or her sole or main residence as residential accommodation may be exempt from income tax, PRSI and USC in respect of income from the letting where the aggregate of the gross rents and any sums for meals or other services supplied in connection with the letting does not exceed the threshold for the year in question, which is €14,000 for 2017. Although the income is exempt it must be included in the individual’s tax return for the year in question.
This relief does not apply to companies or partnerships.

https://www.oireachtas.ie/en/debates/question/2017-07-04/113/

Always thought it was the total amount received and can see OP's point that it doesn't mention utilities anywhere. Would this section 2(b) be relevant?

“216A.—
(2)
(b) In ascertaining the amount of relevant sums for the purposes of this subsection no deduction shall be made in respect of expenses or any other matter.


If the lodger was asked to pay their share of any bills directly to the utility company, then it's not received by the owner so can't be income. Would that keep everything separate as far as the Revenue limit is concerned?

Claw Hammer

davindub wrote: »

Anyone doing Rent a room should definitely confirm with Revenue, they have a helpdesk and are helpful enough. It would equally be expensive not to collect bills due to being at the limit with rent only.

What most people are ignoring is the phrase "similar goods and services" in the legislation. If light heat is considered similar to "meals, cleaning, laundry" then it certainly poses a question as to what people think is not similar?

https://www.charteredaccountants.ie/taxsource/1997/en/act/pub/0039/sec0216A.html?AspxAutoDetectCookieSupport=1

"Relevant sums" certainly includes rent. Rent is not similar to meals claim your laundry. On that basis heat and light certainly come into the mix since they are supplied in connection with the letting.

Samuel T. Cogley

Answers in bold.

Calltocall wrote: »

Hi Folks

I have some questions re Rent A Room Scheme as I’m considering renting out a room

1. Do you draw up a contract for tenant to sign?


Definitely not. You may inadvertently contract yourself to something you would otherwise not have to. A list of House Rules is all you need.


2. Where is the best place online to source a tenant?


Daft


3. Is it a good/bad idea, all thoughts welcome


We've done it for four years and so far so good. Go with your gut, if you get the slighest incling the person might be trouble / snorer / nose picker go with someone else. Depending on your location you're likely to have a number of options.


4. What is the standard notice period applied if things don’t work out, is it four weeks?


Reasonable notice, but it is not defined. The standard practice (IMO) is notice is as long as the rent-period. So either a week or a month. Any major issues though a couple of days.


It looks to be a good Scheme on paper but I’m wary of a stranger living in my home so I think point 2 is most important to me as to where best place to source reputable tenants.

Thanks for any input

E-mail only for enquiries, DAFT will make you think you need to put in a telephone number ignore it. Ask for a few lines about themselves and short-list from there.

Sorry for the typos and spelling my spell check seems to have gone off.

davindub

Claw Hammer wrote: »

"Relevant sums" certainly includes rent. Rent is not similar to meals claim your laundry. On that basis heat and light certainly come into the mix since they are supplied in connection with the letting.

It most certainly does include rent, rent has it's own words attached to it

"means all sums arising in respect of the use for the purposes of residential accommodation"

It then lists laundry, etc, and other similar services.

1874

davindub wrote: »

Anyone doing Rent a room should definitely confirm with Revenue, they have a helpdesk and are helpful enough. It would equally be expensive not to collect bills due to being at the limit with rent only.

What most people are ignoring is the phrase "similar goods and services" in the legislation. If light heat is considered similar to "meals, cleaning, laundry" then it certainly poses a question as to what people think is not similar?

https://www.charteredaccountants.ie/taxsource/1997/en/act/pub/0039/sec0216A.html?AspxAutoDetectCookieSupport=1

That really confirms it,

1874

Claw Hammer wrote: »

Have you any authority for this proposition or is it your own view? it seems to me they are incidental costs because liability for them only arises as a direct result of the rental of the room. Revenue check the total amount of money passing between the owner and the occupant. Over €14k tax due, below €14k, no tax due. Revenue do not want to find €15k was passed over but €1,200 is claimed to be dues to heat, light etc.
The ease or difficulty of collecting money for bills is not relevant to this issue. If you get more than €14k and some of that is due to utilities, and you argue the point, it could turn out to be a very expensive way of testing your theory.

I see, question my authority, my authority is I can read the legislation. If revenue meant what you say they have gone around about way of making it not clear, further to that they could easily have specified it, I don't believe it was intended when that legislation was drafted, now later it's being interpreted as they feel it suits them. Some of the links provided make it very clear that utilities are not mentioned or even referred to.
Also your understanding of what definition of incidental? Is what? I think they have used a poor choice of word to determine what associated coats are connected to the rental figure. If you rent a property you do not typically get electric heat broadband or tv included, it's not a cost associated with paying for a property, and also, if you go to a hotel you will be charged for incidental costs in addition to what you have paid for the room, some minor costs will be included, they won't count how many sheets you used to wipe your backside, but more significant things like call usage or drinking from the fridge certainly will be charged for.
I don't believe it was written for what is now being stated as utilities were never typically included in room rentals, quite rightly and as a sensible means to prevent misuse. In a student digs accommodation yes, and I believe the wordings original intent is clear that it was to prevent someone being charged for incidental charges excessively (like a hotel does), for cheap items where an unscrupulous person might try make an unreasonable profit by providing or insisting someone buy or use. The accountant link provided confirms that, and no doubt you can ring revenue and what will they say? Only quote the party line, I get that information from acts and SIs if I want it, it may be there scheme but they either shot themselves in the foot or are misinterpreting it after the fact intentionally, the authority still comes in the legislation, not what customer service at a over the phone or what an entire dept says.

Say someone rents a room, it's x amount per month, you can't be charged costs for cleaning or laundry or meals, some may do that excessively to bring in money out of proportion to their cost (and try to consider that outside the allowable limits), the simple way to avoid that is not provide certain things, in no way would I be cooking meals for people, not as a cost saving thing, don't have the time to be doing that, previously I used to put up a cleaning Rota and get people to clean their own mess anyway, that said I'm considering letting rooms again, I'd have people clean their own dishes but I'd probably have someone come in and do general cleaning, and maybe change sheets every so often to keep a room clean, ( I discovered in tge past some people didn't either change sheets or didn't use any which is a bit manky, doesn't do for keeping good quality mattresses, a side thing)

Rothmans

I'd echo what previous posters have said. Charge bills separate to the rent. My first lodger took the proverbial when I included the bills.

I put €100 on the prepay gas meter one Friday before going away for the weekend. Arrived in from work on the Monday evening. I went to put the heating on to find that it was already on. But no heat. Couldn't figure what the problem was. Thought the boiler went kaput. I eventually went out to the meter to find that the balance was zero and the emergency credit had been used. The lodger had obviously put the heater on Friday evening and left it on constant all weekend (notwithstanding that there was a timer on it)!

My electrity bills incresed by alot more than would be expected also. I subsequently found out why. He asked me to go into his room one day at lunch time while he was in work as he misplaced his wallet and wanted to know if he left it there. Went in and the room was boiling. He bought an electric heater, and obviously just left it on all day, even when not there. Not only would this eat up electric, but a definite fire hazard (which actually peeved me off more). This was in June ffs.

This really peeved me off as the rent I was charging was pretty low in the first place.

I err on the side of caution re whether the bills go towards the 14k limit. If Revenue interpret electric and gas as counting towards the limit, I take that to be true. As regards interpretation, i understand that Revenue is assumed to be correct in their interpretation of legislation, and they can impose penalties against you on this basis. If you dispute Revenue interpretation, the only way for you to challenge this is through the courts. This could be a very expensive way to prove your point, and you probably would lose. The act may not have been intended to include bills but that's the way it reads. Better safe than sorry IMO.

JustAThought

Be clear in the ad - eg. Double room for single occupancy only, rent xxx & bills extra ( wifi, tv/sky/ bin charges/ gas & LX etc), deposit & bank/work references required,free parking or onstreet residental /free parking etc. ID required when viewing: passport/DL. No couples -sorry!

If you are nervous about sharing ask why - fear of the unknown or are you not really wanting to have someone live in your place & be in the living room & cooking in your kitchen. If you are taking their $ they have to be able to feel at home and welcome & not be micromanaged at every corner beyond basic groundrules.

1874

Rothmans wrote: »

I'd echo what previous posters have said. Charge bills separate to the rent. My first lodger took the proverbial when I included the bills.

I put €100 on the prepay gas meter one Friday before going away for the weekend. Arrived in from work on the Monday evening. I went to put the heating on to find that it was already on. But no heat. Couldn't figure what the problem was. Thought the boiler went kaput. I eventually went out to the meter to find that the balance was zero and the emergency credit had been used. The lodger had obviously put the heater on Friday evening and left it on constant all weekend (notwithstanding that there was a timer on it)!

My electrity bills incresed by alot more than would be expected also. I subsequently found out why. He asked me to go into his room one day at lunch time while he was in work as he misplaced his wallet and wanted to know if he left it there. Went in and the room was boiling. He bought an electric heater, and obviously just left it on all day, even when not there. Not only would this eat up electric, but a definite fire hazard (which actually peeved me off more). This was in June ffs.

This really peeved me off as the rent I was charging was pretty low in the first place.

I err on the side of caution re whether the bills go towards the 14k limit. If Revenue interpret electric and gas as counting towards the limit, I take that to be true. As regards interpretation, i understand that Revenue is assumed to be correct in their interpretation of legislation, and they can impose penalties against you on this basis. If you dispute Revenue interpretation, the only way for you to challenge this is through the courts. This could be a very expensive way to prove your point, and you probably would lose. The act may not have been intended to include bills but that's the way it reads. Better safe than sorry IMO.

There are certain electrical goods that arent safe to use and in particular when people are not around, unfortunately that means listing off a host of rules because some people are either dim or reckless and I prefer not to risk burning my house down for someones stupidity. Id more get rid of someone for that than any other difficulty dealing with them, ie a couldnt care less or careless reckless attiude in the way of concern for my place.

So I outright do not allow pans of oil for cooking chips, no reason for them, they are dangerous if anyone turns their back and goes to another room, and they end up just turning a kitchen into a greasy mess.



yeh it might be better to err on the side of caution of the money thing and just let for the year less the summer. I would not include bills for the reason you mention, but I would take an amount X for it in advance ie at the time lodgings are paid, if the bills are less than that value X, Id roll it into a future bill, if its more than X and there was no balance carried forward from previously then I'd be looking for the balance, encourage people to use what they need and no more.
Id a similar experience with people with heating on, going around in t-shorts or with windows open, just either plain selfish or plain stupid.

riclad

Make it clear there s no subletting allowed,.no overnight guest,s ,
There should be no one in the house after 11 pm, or midnight apart from
the owner and the tenants .
Ask for id and a payslip, proof of employment.
You do not want a tenant who is an intern on 200 euros wages ,
you need to have a tenant who earns at least 300 euro per week, so they can afford to pay the rent .
my friend had 3 tenants, he would charge each tenant 1/4 of the esb bill
and the gas bill every 2 months .
Most of his tenants were single women over 20 who
worked in offices .
he rented out rooms for 10 years .
Only take a tenant who works within 30 minutes commute of where the house is .
I,d be suspicious of a potential tenant who works in swords and is
looking at renting in rathmines .
Is there a reason why he cannot find a place close to where he works ?
i do.nt think he charged for wifi as the bill was only 60 euro per month .
I dont think he charged for cable tv .
He sent all his accounts , financial data to an accountant who sent his tax returns to the revenue .
He claimed 12k at that time against his rental income which was declared on his tax return.
He had a rule no loud music ,or tv after 11 pm .
Each room had a 25 inch tv connected to a free to air satellite sky reciever .

Claw Hammer

davindub wrote: »

It most certainly does include rent, rent has it's own words attached to it

"means all sums arising in respect of the use for the purposes of residential accommodation"

It then lists laundry, etc, and other similar services.

The word rent itself isn't mentioned.

davindub

Claw Hammer wrote: »

davindub wrote: »

It most certainly does include rent, rent has it's own words attached to it

"means all sums arising in respect of the use for the purposes of residential accommodation"

It then lists laundry, etc, and other similar services.

The word rent itself isn't mentioned.

I don't think you have read that correctly, the quoted words describe "rent"?

Claw Hammer

davindub wrote: »

I don't think you have read that correctly, the quoted words describe "rent"?

Where is the word rent used?

davindub

Claw Hammer wrote: »

davindub wrote: »

I don't think you have read that correctly, the quoted words describe "rent"?

Where is the word rent used?

No where in that description?

I actually don't know how to explain this to you

riclad

theres some stupid tenants out there ,
maybe a rule use central heating and radiators , for heating,
No one is allowed to buy electrical heaters .
Someone will forget to turn it off ,its a fire risk .

i do not want to be sexist the ideal tenant is a woman over 25 ,who works 9-5 or a nurse.
In the midst of a housing crisis , the revenue would be better off
removing the clause re utility bills .To encourage more people to rent out a spare room.

1874

riclad wrote: »

theres some stupid tenants out there ,
maybe a rule use central heating and radiators , for heating,
No one is allowed to buy electrical heaters .
Someone will forget to turn it off ,its a fire risk .

i do not want to be sexist the ideal tenant is a woman over 25 ,who works 9-5 or a nurse.
In the midst of a housing crisis , the revenue would be better off
removing the clause re utility bills .To encourage more people to rent out a spare room.

The clause isnt there, they should remove the ambiguousness though

Claw Hammer

davindub wrote: »

No where in that description?

I actually don't know how to explain this to you

Quite simple. Show me where the word "rent" appears.

davindub

Claw Hammer wrote: »

davindub wrote: »

No where in that description?

I actually don't know how to explain this to you

Quite simple. Show me where the word "rent" appears.

Too Easy, You mentioned it just there!

Graham

Mod Note

davindub / claw hammer, take it to PM.

WarbossPepe

Anyone know what the story is if you're travelling? I'm aiming to go travelling with my partner for 6-12 months at some stage, but would also love to be able to avail of the rent-a-room scheme while we're away.

In this article it mentions:
- you must be living in the property in which the room is rented out and this must be your primary residence
- the room cannot be rented to family members
- short-term leases (such as Airbnb, bed and breakfast, and guesthouse bookings) are not eligible for Rent-a-Room Relief.
- a self-contained unit which is beside the house, but not directly attached to it, cannot qualify for relief
- While tax-free income can be earned through this scheme, landlords are still required to file an annual income tax return

The house will still be our primary residence, and the room will be "rented" while we're there, but just wondering what the craic is while we're away if it still allows for that situation.

Samuel T. Cogley

WarbossPepe wrote: »

Anyone know what the story is if you're travelling? I'm aiming to go travelling with my partner for 6-12 months at some stage, but would also love to be able to avail of the rent-a-room scheme while we're away.

In this article it mentions:
- you must be living in the property in which the room is rented out and this must be your primary residence
- the room cannot be rented to family members
- short-term leases (such as Airbnb, bed and breakfast, and guesthouse bookings) are not eligible for Rent-a-Room Relief.
- a self-contained unit which is beside the house, but not directly attached to it, cannot qualify for relief
- While tax-free income can be earned through this scheme, landlords are still required to file an annual income tax return

The house will still be our primary residence, and the room will be "rented" while we're there, but just wondering what the craic is while we're away if it still allows for that situation.

I'd say it would come down to being ordinarily resident - here 183 days thingy but am open to correction.

tabby aspreme

Two queries regarding rent a room, 1. is the scheme subject to RPZ.

2 The space being rented is an attached granny flat all under the same roof with its own front door, it has a separate heating and esb supply to the main house, which will be in the renters name, would the cost of heat and electricity be taken into account by revenue if it's paid directly to the providers by the renter.

Caranica

Does it have a connecting door to the main house?

tabby aspreme

https://www.boards.ie/discussion/comment/117814634#Comment_117814634

Yes