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Definition of Primary Residence + rent a room

  • 26-08-2020 8:30am
    #1
    Site Banned Posts: 280 ✭✭


    Howdy all. Have had a discussion on another thread about this and there's conflicting information regarding my own knowledge on the matter.

    Theoretical scenario is this:

    - I buy a property to live in.
    - I rent out a room under rent a room scheme.
    - Maybe a couple years later I move to another location, rent/move home or whatever.
    - I rent out the other room that I was in.
    - All bills etc. stay in my name, income remains below the 14,400 for rent a room scheme.

    The definition of primary residence is unclear. No definition based on number of nights slept there or anything.

    From some irish tax company websites there's lots of mentions about if you have two propertys you have to "choose" your main residence.

    Also others claimed they would be tenants and could report to the RTB. I claim they can't be, because they're licensees as all bills would be in my name + registered for rent a room.

    What are your thoughts as it looks from what I see that you define your main residence yourself?


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Comments

  • Registered Users Posts: 10,684 ✭✭✭✭Samuel T. Cogley


    As per the guidelines, it's where you're expected to be found. So if you've moved to another house, the new house is your PPR. Now assuming you genuinely split time between locations I'd say the majority wins out and if you're in one over the 183 days (or what ever it is) for tax purposes I'd say the revenue would have an even stronger case for saying it was your PPR.

    The fact that your bills go somewhere does not make it a PPR imho.


  • Moderators, Society & Culture Moderators Posts: 38,134 Mod ✭✭✭✭Gumbo


    Howdy all. Have had a discussion on another thread about this and there's conflicting information regarding my own knowledge on the matter.

    Theoretical scenario is this:

    - I buy a property to live in.
    - I rent out a room under rent a room scheme.
    - Maybe a couple years later I move to another location, rent/move home or whatever.
    - I rent out the other room that I was in.
    - All bills etc. stay in my name, income remains below the 14,400 for rent a room scheme.

    The definition of primary residence is unclear. No definition based on number of nights slept there or anything.

    From some irish tax company websites there's lots of mentions about if you have two propertys you have to "choose" your main residence.

    Also others claimed they would be tenants and could report to the RTB. I claim they can't be, because they're licensees as all bills would be in my name + registered for rent a room.

    What are your thoughts as it looks from what I see that you define your main residence yourself?

    If you say it’s your PPR, yet are living in the new house you built separately (as per your other thread) then it’s fraud and illegal.

    You cannot claim rent a room on the original house and the occupiers become tenants.


  • Moderators, Society & Culture Moderators Posts: 38,134 Mod ✭✭✭✭Gumbo


    From Revenue Site
    A PPR is a house or apartment which you own and occupy as your only or main residence


  • Administrators Posts: 53,126 Admin ✭✭✭✭✭awec


    Not sure how this is even a question, it's fairly straightforward.

    Once you move out of the original house then it's no longer your PPR, you can no longer avail of rent a room on it, and anyone you rent it to is a tenant with full tenancy rights.


  • Site Banned Posts: 280 ✭✭CertifiedSimp


    As per the guidelines, it's where you're expected to be found. So if you've moved to another house, the new house is your PPR. Now assuming you genuinely split time between locations I'd say the majority wins out and if you're in one over the 183 days (or what ever it is) for tax purposes I'd say the revenue would have an even stronger case for saying it was your PPR.

    The fact that your bills go somewhere does not make it a PPR imho.

    Can you link me to the guidelines that say this?

    There is no mention of 183 days anywhere on revenue.


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  • Site Banned Posts: 280 ✭✭CertifiedSimp


    awec wrote: »
    Not sure how this is even a question, it's fairly straightforward.

    Once you move out of the original house then it's no longer your PPR, you can no longer avail of rent a room on it, and anyone you rent it to is a tenant with full tenancy rights.

    Definition of PPR is not clear though.


  • Administrators Posts: 53,126 Admin ✭✭✭✭✭awec


    Definition of PPR is not clear though.

    It's fairly clear.

    If you don't live there, it's not your primary residence. You will have a hard time convincing anyone on here, or anyone in Revenue, that somewhere you do not reside is your primary residence. Even typing it out here sounds stupid.


  • Registered Users Posts: 10,684 ✭✭✭✭Samuel T. Cogley


    Can you link me to the guidelines that say this?

    There is no mention of 183 days anywhere on revenue.
    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.

    Apologies a bit of paraphrasing on my part, or something I've read else where but the above is the guidance from the revenue web site.

    The 183 days (or whatever it is) is just the number of days before you're considered tax resident. I'm simply saying that if you're in the 'other' residence' at least that long, I'd say revenue have a strong case for saying it's your PPR.


  • Site Banned Posts: 280 ✭✭CertifiedSimp


    awec wrote: »
    It's fairly clear.

    If you don't live there, it's not your primary residence. You will have a hard time convincing anyone on here, or anyone in Revenue, that somewhere you do not reside is your primary residence. Even typing it out here sounds stupid.

    Why couldn't it?

    Are you telling me lads who work up the country for 5 days a week and come back to their house at weekends are not living in their main residence?


  • Administrators Posts: 53,126 Admin ✭✭✭✭✭awec


    Why couldn't it?

    Are you telling me lads who work up the country for 5 days a week and come back to their house at weekends are not living in their main residence?

    They are, but their main residence is not their house that they spend weekends in, as evidenced by the fact they don't reside there the majority of the time.


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  • Site Banned Posts: 280 ✭✭CertifiedSimp


    Apologies a bit of paraphrasing on my part, or something I've read else where but the above is the guidance from the revenue web site.

    The 183 days (or whatever it is) is just the number of days before you're considered tax resident. I'm simply saying that if you're in the 'other' residence' at least that long, I'd say revenue have a strong case for saying it's your PPR.

    Have you got a link about where it says about where friends find you?

    They'd expect to find me in my main residence because that's my main residence. And what if someone has no friends?



    And if someone works in Dublin 5 days a week staying in B&B are you telling me if they sold their house it wouldn't be exempt from CGT? I find this highly doubtful.


  • Site Banned Posts: 280 ✭✭CertifiedSimp


    awec wrote: »
    They are, but their main residence is not their house that they spend weekends in, as evidenced by the fact they don't reside there the majority of the time.

    So any lad who did that and then sold their primary house paid CGT on it?

    I highly doubt that.


  • Registered Users Posts: 3,058 ✭✭✭Sarn


    Why couldn't it?

    Are you telling me lads who work up the country for 5 days a week and come back to their house at weekends are not living in their main residence?

    I would imagine this would be more of a grey area, however, they would still be residing in their house. The understanding is that you rent out a spare room, if you rent your bedroom to someone that is not a spare room.


  • Registered Users Posts: 10,684 ✭✭✭✭Samuel T. Cogley


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

    Very few people win when challenging the Revenue from what I understand. One's main concern wouldn't be that Revenue would catch up with you, it's a claim to the RTB that someone living in your 'Is my PPR but isn't really' property claims they are a de facto tenant.


  • Moderators, Society & Culture Moderators Posts: 38,134 Mod ✭✭✭✭Gumbo


    Have you got a link about where it says about where friends find you?

    .

    Here you go.
    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.

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


  • Moderators, Society & Culture Moderators Posts: 38,134 Mod ✭✭✭✭Gumbo




    And if someone works in Dublin 5 days a week staying in B&B are you telling me if they sold their house it wouldn't be exempt from CGT? I find this highly doubtful.

    This is different.
    The lad working 5 days a week in Dublin doesn’t reside in a B&B. That is not their home and would not get post, deliveries, bills, legal documents sent to a B&B.


  • Site Banned Posts: 280 ✭✭CertifiedSimp


    Gumbo wrote: »

    That gives the definition for main residence but not for sole, which I have just found. :)

    https://www.revenue.ie/en/property/living-city-initiative/lci-definitions.aspx
    Your sole or main residence is the property which you live in, or which you have chosen as your main home.

    If you have two residences, you must choose one residence to be your main residence. You must notify Revenue of your choice in writing. This may affect your tax situation, particularly in the case of Principal Private Residence Relief.

    This clears things up perfectly. You choose what your PPR is. Otherwise they would say, the property you live in for majority of the year or give a number of days required to live there.


  • Administrators Posts: 53,126 Admin ✭✭✭✭✭awec


    This still does not mean you can claim rent a room relief on it, and that anyone you rent it to is a licensee. The idea is totally daft.

    If you don't live there you cannot. The rules on rent a room are clear.
    Your main residence is your home for most of the year and where friends would expect to find you.


  • Site Banned Posts: 280 ✭✭CertifiedSimp


    awec wrote: »
    This still does not mean you can claim rent a room relief on it, and that anyone you rent it to is a licensee. The idea is totally daft.

    If you don't live there you cannot. The rules on rent a room are clear.

    I think it does.

    If it's my PPR, no lease agreement, no bills etc in tenants name how can they be tenants?


  • Administrators Posts: 53,126 Admin ✭✭✭✭✭awec


    I think it does.

    If it's my PPR, no lease agreement, no bills etc in tenants name how can they be tenants?

    You don't live there. They are tenants.

    Bills in their name is of no relevance whatsoever. It doesn't matter if you got every bill you have delivered there, if you don't live there it's not your main residence and therefore not eligible for rent a room relief.


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  • Posts: 0 [Deleted User]


    awec wrote: »
    They are, but their main residence is not their house that they spend weekends in, as evidenced by the fact they don't reside there the majority of the time.

    If you are actually spending time in both houses it would be fairly easy to claim one or the other as primary residence (just a matter of playing around with the number of days you spend in each on paper - very hard to actually prove). Plenty of people are renting rooms out in one house they live in during the week and have another house where their family lives etc.

    If you never spend any time at all in it then that’s a different story and it’s obviously not rent a room.


  • Site Banned Posts: 280 ✭✭CertifiedSimp


    awec wrote: »
    You don't live there. They are tenants.

    Bills in their name is of no relevance whatsoever.

    How does anyone know where anyone sleeps the majority of the time?


  • Registered Users Posts: 3,098 ✭✭✭Browney7


    I think it does.

    If it's my PPR, no lease agreement, no bills etc in tenants name how can they be tenants?

    If it's a 2 bed property and you've rented the two rooms out I'd expect the tenants can go to the RTB after some time to adjudicate they do indeed have a defacto tenancy even though you've tried to structure that you don't. If you keep a room for yourself you might have some hope.

    If you buy an alternate property and live in it but claim the other as your PPR you're opening up CGT considerations also.


  • Registered Users Posts: 10,684 ✭✭✭✭Samuel T. Cogley


    Chosen does not necessarily mean you make a conscious decision. You can choose by doing.


  • Administrators Posts: 53,126 Admin ✭✭✭✭✭awec


    How does anyone know where anyone sleeps the majority of the time?

    Well if you have a 2 bed property, and you have rented out both rooms, and you are claiming rent a room relief, it is pretty obvious that you don't live there.

    Unless you're going to try and claim that you live there and sleep on the sofa every night. :rolleyes:


  • Registered Users Posts: 10,684 ✭✭✭✭Samuel T. Cogley


    I think it does.

    If it's my PPR, no lease agreement, no bills etc in tenants name how can they be tenants?

    The RTB find people to be tenants all the time.

    As for where you sleep, the RTB will take testimony from both parties and it is entirely within their remit to decide who they believe.


  • Site Banned Posts: 280 ✭✭CertifiedSimp


    Browney7 wrote: »
    If it's a 2 bed property and you've rented the two rooms out I'd expect the tenants can go to the RTB after some time to adjudicate they do indeed have a defacto tenancy even though you've tried to structure that you don't. If you keep a room for yourself you might have some hope.

    If you buy an alternate property and live in it but claim the other as your PPR you're opening up CGT considerations also.

    I could just rent it to a couple then and leave one room free.

    Surprised the amount of pushback on this, I know a couple people who have been renting out their PPR and living elsewhere and getting paid 20k+ a year into their bank accounts and nothing has been said. And that's going on nearly a decade now. And they aren't even registered on the rent a room.


  • Registered Users Posts: 10,684 ✭✭✭✭Samuel T. Cogley


    I could just rent it to a couple then and leave one room free.

    Surprised the amount of pushback on this, I know a couple people who have been renting out their PPR and living elsewhere and getting paid 20k+ a year into their bank accounts and nothing has been said. And that's going on nearly a decade now. And they aren't even registered on the rent a room.

    Many of us don't like people who commit tax fraud, funny I know.


  • Registered Users Posts: 3,098 ✭✭✭Browney7


    I could just rent it to a couple then and leave one room free.

    Surprised the amount of pushback on this, I know a couple people who have been renting out their PPR and living elsewhere and getting paid 20k+ a year into their bank accounts and nothing has been said. And that's going on nearly a decade now. And they aren't even registered on the rent a room.

    If people are choosing to flout taxation law that's their business and in the event (albeit maybe unlikely) that they receive an audit or revenue come knocking, they may be in for a world of hurt.

    You'd also be potentially somewhat hostage to this couple if you ever fell out and they had the sword of Damocles hanging over you with a "I'll grass to the revenue on you...".

    What you choose to do is up to you - it's your business at the end of the day


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  • Registered Users Posts: 1,731 ✭✭✭mrslancaster


    awec wrote: »
    Well if you have a 2 bed property, and you have rented out both rooms, and you are claiming rent a room relief, it is pretty obvious that you don't live there.

    Unless you're going to try and claim that you live there and sleep on the sofa every night. :rolleyes:

    That's not unheard of. people sleep on sofa-beds.


This discussion has been closed.
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