Rent a room relief - receiving more than the allowance?

The threshold was raised to €10k this year for rent-a-room relief. How much income tax would I have to pay if I got say €15k per year (5k more)?

Comes up time and time again on aam (run a search). If you exceed the threshold by €0.01 you are liable for tax on ALL of it. Furthermore, there may be issues with Stamp Duty Exemption.

hmm did a search on rent relief. Found some interesting info but nothing that answered my question specifically ie what rate of tax will I have to pay on the extra 5k or 15k...

serotoninsid has answered the question. The question definitely has been asked and answered before as he says.

You pay tax on the €15,000
Normally at highest rate as it's income. Not sure if you can offset interest on any mortgage.

The rate you pay will depend on your other incomes i.e. include it as your wage and if that brings you into the 41% bracket then thats what you'll pay. Remember the property may be now considered as an investment property so when you sell it you more than likely will be liable for capital gains tax at twenty per cent of the gain on the house value since you bought it therefore it may not be woth getting the extra five grand as you will only see three grand of this into your pocket. Lets say you rent it out for five year, that and extra fifteen grand, sounds good but not if your hit with a thirty grand capital gains tax

JJ1310 said:

Remember the property may be now considered as an investment property so when you sell it you more than likely will be liable for capital gains tax at twenty per cent of the gain on the house value since you bought

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It is still the OPs principal private residence so why would CGT be applied when they sell it?

I could be completely wrong but if you are taking an income from the property above the rate of the rent a room scheme I think it becomes an investment property ie you are making money and therefore you are going to be taxed.

Could be completly wrong and probably am

Any shed some light on this

Clubman?

I think it doesn't become classed as an investment property as its your ppr /home. The whole amount is just treated as if it were income from another source, on top of your other earnings. So if you earn a wage elsewhere ,you will most likely pay 41% on it all. IF YOU DONT HAVE INCOME over around 21k from other sources it might be 20% OF 15K still a big whack of cash ! can the lodger gift you 3k a year tax free ? not sure .