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Rent a room 14K tax free scheme to be extended to SW recipients

  • 19-05-2022 1:35pm
    Registered Users Posts: 117 ✭✭ YipeeDee

    So let me get this straight.

    The big corporate investor LLs who are supposed to pay just 12.5% tax are paying little or no tax at all.

    Homeowners renting rooms can earn 14K tax free and not be bound by tenancy legislation and standards.

    Now social welfare tenants who are getting the lion’s share of their rent paid for them by the State can also make 14K tax free renting out rooms in council homes. That’s along with any and all other benefits remaining intact.

    What kind of mugs are small landlords renting out one or two properties, paying 52% tax and risking enduring two years of no rent, trying to get non paying tenants removed. And sure if they smash up the property, it’s just tough luck!

    You’d want to be stark raving mad to rent out a property in this crazy system.

    We should all just get out, sign on the dole, get a cut priced rented council house, medical card, fuel allowance, back to school allowance etc and 14K a year renting out rooms.

    Being a small landlord in Ireland is a mugs game.

    (Edit At time of posting I had interpreted the article as applying to SW tenants living in State supplied social housing. I have since been kindly informed that it’s not applicable to SW “tenants” . I stand corrected on that)

    Post edited by L1011 on



  • Registered Users Posts: 505 ✭✭✭ CrookedJack

    Or you could sell your investment property, and let someone move into it, taking a family off the social welfare list. You don't have to be a mug, I don't have to pay for someone to rent from you, the country has more money to spend on services. Win win win.

  • Registered Users Posts: 117 ✭✭ YipeeDee

    Nope, won’t be selling my property, it’s for my kids when they’re ready to move in. And it wasn’t purchased as an “investment property”. It was my first home, I lived there.

    And BTW, the only people paying to rent from me are my two tenants. Rest assured, you’re not paying a cent towards their rent.

    Would be better off to let it stand idle at this stage.

  • Registered Users Posts: 12,730 ✭✭✭✭ average_runner

    Its not win win. If all landlords sell there be no properties to rent, this is what happened 12 years ago. Except the position we are in now will be worst.

  • Registered Users Posts: 505 ✭✭✭ CrookedJack

    That's not what I suggested, and that's not what happened 12 years ago. It's just hyperbole.

    Well then how are you the mug? You get to give your kids a property, that will be at least partially paid for by someone else. And the someone else likely directly or indirectly subsidised by taxpayer money, so able to pay you more. Unless you think your rental income should be tax-free and so your gift to your children to be even more directly paid for by the rest of us?

    It really doesn't sound like you're the mug here.

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  • Registered Users Posts: 505 ✭✭✭ CrookedJack

    Great, good for you then. You're a great case for rental income being taxed as it is purely income generated from your wealth. Still can't see how you're a mug though.

  • Registered Users Posts: 16,720 ✭✭✭✭ Donald Trump

    As I pointed out, it would be trivial for you to put yourself into their shoes should you so wish. There are plenty of charities etc that would gladly accept a gift of your properties. You could then organise to be fired from your job (if you still work) and go on the dole and get yourself a free house.

    You can put yourself into their shoes very quickly. They can't put themselves into yours quite as quickly

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  • Registered Users Posts: 16,720 ✭✭✭✭ Donald Trump

    I find that those least capable are more likely to attribute their luck to either hard work or genius.

    Again, to repeat, you can put yourself into their shoes tomorrow if you want. And you can also avail of the 14k tax free income today if you want.

    Be careful what you wish for!!!

  • Registered Users Posts: 12,730 ✭✭✭✭ average_runner

    It is what happened 12 years ago. Alot of landlords got pissed off with the government as brought in a rent ceiling but wouldn't bring in a min rent during the property crisis when rent went through the floor.

    So there was protection for the tenants but not the landlord, so once the property crisis ended, alot of landlords sold their properties and got out of that business.

  • Registered Users Posts: 505 ✭✭✭ CrookedJack

    Only children think of tax as a punishment. The tax system is designed to be inequitable as wealth is unequal. Are you honestly suggesting we should tax people by how hard they worked in the past? Seems silly to me.

    Whereas taxing people who have wealth and are using it to generate income seems perfectly fair.

    How does paying a reasonable amount of tax on income generated by your wealth make you a mug?

  • Registered Users Posts: 117 ✭✭ YipeeDee

    What I’d “wish for” is an equitable tax system that doesn’t screw one set of citizens who’ve worked for everything they own. In order to provide for another set of citizens, many of whom have had their lifestyle handed to them since the day they left school. Or at the very least, make this 14K tax free allowance available to every citizen in the country equally that provides accommodation for rent.

  • Registered Users Posts: 2,243 ✭✭✭ 1874

    why tax exempt or some form of it would be a good idea for small landlords,

    Because they are funding and taking all the risk of providing property which the State and thereby the taxpayer would otherwise have to fund, thats not to say there arent problems with private rented property, there certainly are risks for those providing the service.

    The State has no problem allowing vulture funds away with zero tax liability, where the profits go outside the state (and given there is little or no tax paid, why are people so opposed to where that would be most likely only reinvested or spent withing Ireland?).

    I'd have no issue with social tenants not having allowances affected by letting a room, but I think there should be conditions, such as they pay the liability for any additional insurance or better still obliged to take it out themselves for any additional people, potentially agreement from the landlord as wear and tear would be increased, and so long as the number of people was not incompatible with the property, ie too many people or vehicles, which could be a safety concern or affect others living nearby (noise or no space for vehicles).

    My problem with the 14k allowance, especially as it is now given to SW tenants is how it is implemented.

    It's a 14k allowance, it should stay that way, if you earn anything over 14k the entire amount is taxed, that's ridiculous, it would be simpler to enforce and encourage people to be more open and honest if the 14k limit was tax free regardless, anything over that could be taxed at X value, not necessarily the marginal rate someone pays but something defined, and it should be possible to do a basic return online for it, no hardcopy form filling or making it complicated needing an accountant, just a guided online process.

    I think it would open the possibility of making more rooms available to the market more significantly, when people think they might get the hassle of dealing with the Revenue, I think they weigh the hassle and inconvenience and just wont bother.

  • Registered Users Posts: 2,035 ✭✭✭ tscul32

    Will the 14k be taken into account for social welfare benefits? Like when assessing household income for means testing. I presume many of these tenants aren't in paid employment so even if it was liable to income tax they'd barely have a tax bill for 14k.

  • Registered Users Posts: 16,720 ✭✭✭✭ Donald Trump

    The risk is idiosyncratic and therefore should not be compensated.

    It is the one completely passive and capitalistic income and it amazes me that people think they should be allowed to get it tax free.

  • Registered Users Posts: 16,720 ✭✭✭✭ Donald Trump

    It is available to you. Has been for years. It's nobody's fault but your own if you did not know it

  • Registered Users Posts: 2,243 ✭✭✭ 1874

    Why is it a common theme that you see that amateur landlords think their additional income should be tax exempt? I find it quite strange. If I was a schoolteacher and invested in a restaurant, I don't think I'd be assuming that I shouldn't have to pay income tax on the income from the restaurant. If I was a mechanic and set up a sideline car-hire business, I wouldn't expect for my sideline income to be tax free.

    It isn't essential for people to go to a restaurant, the State don't need to provide people restaurants to eat at, If the State wont invest in the cost of providing houses (thereby saving the taxpayer in the shortterm at least), and a private citizen does, why are some so adverse to the provider treating it like a business and making a profit? or be bilked for tax. If you apply your logic to Restaurants, the owners should just feed people if the State aren't, no profit is allowed to be made, people can come in and vandalise the place or eat and not pay without being thrown out or pursued for costs. You certainly cant write off costs in rental accomodation like a business such as a restaurant can, even to improve it.

  • Registered Users Posts: 117 ✭✭ YipeeDee

    If this comment was directed to me.

    1. I don’t know where you’re getting “a number properties fully paid for? I rent one single property, that was my first home.
    2. I have said nothing about expecting rental income to be “tax excempt”. Don’t put words into my mouth. I’ve repeatedly said I’d like to see an “equitable” tax system. Since when does “equitable” equate to “tax exempt”?

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  • Registered Users Posts: 16,720 ✭✭✭✭ Donald Trump

    Hold on now. It is likely that all you did was go to a bank, fill out a form and borrow other people's capital to outbid someone else for an already built house.

    Don't be over-estimating your own societal contribution in being able to fill out a form and then being able to figure out that 205 was a number bigger than the 200 the next bidder was offering.

    If you don't know how to write off costs against your rental income, hire a better accountant.

  • Registered Users Posts: 2,243 ✭✭✭ 1874

    I think that is the point, I thought it was available to them already (it certainly is for ordinary private paying tenants) but I take from this that their benefit may be means tested and now it is just being made official that this wont affect their SW entitlements

  • Registered Users Posts: 117 ✭✭ YipeeDee

    The article states “The monthly payment is exempt from tax and is excluded from social welfare means testing”.

    So looks like their 14K tax free allowance won’t affect their SW money and benefits.

  • Registered Users Posts: 2,243 ✭✭✭ 1874

    But in a capitalistic system, you feel its ok for a business (a vulture fund) to not pay tax? but a small time landlord or private person cannot avail of such a thing?

    Im not saying fund people through a system because there is risk, that risk should be limited by real measures, such as rules and laws, Im saying if someone is providing housing which if they are doing whether they are renting out a complete property or rooms, they have provided the funds to do that from after tax income already, collectively those people are saving the State and taxpayer billions from the state building and providing housing.

    Effectively the State agrees with this already, otherwise why is there tax exempt status for vulture funds? because the state knows they have to incentivise them to provide the funds and they are (have to be) compensated ongoing, OR they would not turn up here OR latterly would close up shop. Why are some people so opposed to this being offered to people, citizens withing the State?

  • Registered Users Posts: 16,720 ✭✭✭✭ Donald Trump

    Nothing stopping you from setting up a business.

    You'll learn the hard way though that you will be taxed upon taking your money out of the business. When it stays inside the business, it is subject to business taxation rules. Once it flows out into your pocket so that you can spend it on coke and hookers, then it becomes subject to your personal tax at that point.

  • Registered Users Posts: 117 ✭✭ YipeeDee

    I said “Every citizen that rents out accommodation “.

    So if one citizen rents a room and another citizen rents one house, in an equitable system both would receive the same tax allowance. Especially when the former are having the property provided for them, for the most part, by the State.

  • Registered Users Posts: 16,720 ✭✭✭✭ Donald Trump

    No. Those two things are only the same in your head because you want them to be. But that is only in your head.

    You are free to rent out a room or rooms in your house, and once that is your only rental income, that is 14k tax free. Same as anyone else can. You can't decide to unilaterally apply that to whatever different random conditions suit you personally and whinge if you can't do that.

  • Registered Users Posts: 117 ✭✭ YipeeDee

    Well it would appear that I’m not alone in my “whinging” then, as small LL’s are exiting the market in their droves.

    And the primary reason they’re giving for leaving is “high taxation” followed by onerous legislation.

    And of course the rise in house prices.

    Handing citizens, many of whom have never worked a day in their life, a 14K tax free allowance to rent out accommodation in a property that they don’t own, and is provided for them for the most part by the State, is just another slap in the face for small time LL’s.

    And yet, another reason why, after my current tenants leave, I won’t be renting out my *one and only rental property again.

  • Registered Users Posts: 505 ✭✭✭ CrookedJack

    In fact this is all the article is saying. Recipients of social welfare benefits will be able to earn 14k in room rental without it affecting their means test.

    Not, as the OP mistakenly says, that "SW Tenants" will be able to rent out rooms suddenly and earn 14K tax free.

    This is a sensible idea to allow people with pensions, or other Social welfare payments, who own their own homes, to rent out rooms where previously they wouldn't due to losing their benefits.

    OP is just using this as a pretext to then rail against "SW tenants" and the fact he has to pay income tax like the rest of us.

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  • Registered Users Posts: 16,720 ✭✭✭✭ Donald Trump

    100% up to you. Hopefully the councils will start enforcing proper vacant property levies too at some point in the future. Planning permission is a licence afforded by the State for a particular purpose and the State is fully entitled to make sure that the corresponding implicit obligations are fulfilled.