Abroad while renting out rooms

sean8n

As I understand it:

If you rent out your entire property while abroad, the tenant pays 20% tax directly. Your property must also be registered with the RTB. And rent books provided.

If you live in your property and rent out rooms, then go abroad for a few months say, must you then adapt to the above scenario?

In both cases the duration of the time abroad would be less than 183 days, so you're still tax resident in Ireland.

Additionally, do you register with the RTB when renting rooms? I know if the income is under 14k you do not, but what if it's above, as it would be if an extra room was rented out while abroad.

Kenno90

(I could be wrong)

But you're essentially going on a long holiday. The property is still your primary residence. Just because you wont be there for a few months shouldn't change anything.

You don't need to register with RTB when renting out a room, the only thing you need to do is declare the income. If its over 14k you'll have to pay the tax just like normal. The fact that you'll be out of the country for a while will mean nothing.

I'd recommend you'd charge slightly less than the 14k

Gumbo

Your are on holiday.
It’s still your PPR.
Make sure to keep one room empty that is yours.

If the above then rent a room applies IMO.

dennyk

Regardless of the amount of income you're collecting, if you are only renting out individual rooms in your PPR, then you don't have tenants, you have licensees, so there is no tenancy to register with the RTB and no need for your licensees to withhold and pay taxes on your behalf. The 14k income limit applies to the Rent-a-Room tax relief scheme specifically, but even if you are bringing in more than that amount and can't avail of the relief, the people renting rooms in your residence would still be licensees.

If you take in more than the 14k, then you will owe tax on the whole amount, but as you're a resident in Ireland, Revenue will have no trouble coming after you for what you owe; you won't escape them by going on holiday for a few months. The tenant-withholding-taxes scheme is because it's not cost-effective (or even possible in many cases) for Revenue to pursue landlords permanently living abroad for the relatively small amounts of taxes owed on rental incomes, so they lay the responsibility on the tenants who are known to be resident in Ireland and thus are easier to chase down.

sean8n

Thanks for your detailed reply, I hadn't heard the category licensee before, but it did seem to be a grey area. I'm not sure what gave you the impression, but I don't go abroad to avoid taxes lol. Irish weather is sufficient incentive surely.

dennyk

Nah, I know you ain't trying to dodge taxes or anything, just pointing out that Revenue is concerned with the difficulties of collecting from permanently absentee landlords, not from Irish residents who travel abroad from time to time, so they've made no requirement for licensees (or tenants) of a resident landlord to withhold the tax on their rent payments like they have with tenants of a landlord living abroad full-time. :pac:

The issue of licensees vs. tenants can become a grey area in certain cases, as "licensee" actually applies to a somewhat broader category than just boarders living with their landlords, but people renting individual rooms in the same private residence that their landlord legitimately lives in are very clearly considered licensees, not tenants; there's no grey area there.