Would house split into apartments come under Rent-a-Room?

B

Buttercup

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If I purchased a house which was split into apartments, as an example...

http://daft.ie/searchsale.daft?search=Search+%BB&s[cc_id]=c20&s[a_id][0]=2958&s[mnb]=&s[mxb]=&s[mnp]=&s[mxp]=&s[pt_id]=&s[house_type]=&s[mna]=&s[mxa]=&s[search_type]=sale&s[transport]=&s[advanced]=&s[price_per_room]=&s[refreshmap]=1&offset=70&limit=10&id=91399

and I rented out one of the apartments to a non-relative and the amount charged was under the rent-a-room threshold would this
still be regarded as rent-a-room and therefore the income therefore tax free?

In the linked-to example the total building has a total yield of €13,000 for three apartments. So, in this example, if I rented one
apartment for €4300/year, and lived in the remainder of the property, would this be regarded as rent-a-room?
 
I very much doubt it. Each apartment would most likely be considered a dwelling space as opposed to being a room in the owner's PPR. You should get professional advice though.
 
I wonder would it make any difference if there were only two apartments in the converted house? And the house has only one set of deeds so they're not into two properties with two sets of deeds...
 
I also doubt Revenue would class it as rent a room, if they were ever to do an audit. Is the house Pre 63 or have planning to be split into two? If so forget it...

Towger
 
Of course it wouldn't come under the rent-a-room scheme. You could try it on but that would be an incredibly naive thing to do.
 
Howitzer said:
Of course it wouldn't come under the rent-a-room scheme.
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I don't know if it is "of course" which is why I'm asking. The property is being sold as one property with one set of deeds, and with only one front door - not one front for each self-contained apartment.
Howitzer said:
You could try it on but that would be an incredibly naive thing to do.
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It isn't a matter of "trying something on". I'm trying to discover whether such a set-up would legally be covered under rent-a-room.
 
Towger said:
Is the house Pre 63 or have planning to be split into two? If so forget it...
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If you mean was the house built before 1963, then yes it was. Does the building of the house before 1963 affect rent-a-room? I would expect the house does have planning to split it, if it doesn't then I would not purchase it in any case.
 
Howitzer said:
Of course it wouldn't come under the rent-a-room scheme. You could try it on but that would be an incredibly naive thing to do.
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Why "of course"?

What about a house with a granny-flat as part of it?
I don't see any reason why that couldn't be rented to someone for €7,600 per annum tax free.
 
Andy Doof said:
Why "of course"?

What about a house with a granny-flat as part of it?
I don't see any reason why that couldn't be rented to someone for €7,600 per annum tax free.
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Like I said, you can try it on. Make your tax return early, clearly state that the house is a
Block of 3 self contained Flats With Rental Income
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as stated on the link above, and wait for Revenue's response. I think there is a world of difference between a Granny Flat and the property above.

I'm not a great fan of a lot of these schemes as they can be open to interpretation. Revenue "seems" to be scrutinising the loopholes in these as they become more popular (note the disallowing of related persons from claiming rental relief introduced in the last budget).

The likelihood for the OP is that any income would still be below the interest paid so the entire income would more than likely be tax exempt anyway! The only advantage to the OP of staying within the RAR scheme would be if he was a FTB and was trying to avoid a large stamp duty bill and future CGT liabilities.
 
I saw a query to the sunday times I think in regards to this before and they gave a definite no to using the rent a room scheme .
The definition in the revenue
'where a room (or rooms) in a persons principal private residence is let as residential accommodation, gross annual rental income of up to €7,620 is exempt from tax for 2001 et seq. '

Call them though and check on the definition
 
I still reckon that independent, professional advice is more or less essential in this case.
 
ClubMan said:
I still reckon that independent, professional advice is more or less essential in this case.
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You're dead right...personally, for something this small scale I think going straight to the Revenue and asking them is the best bet.
 
Howitzer said:
Like I said, you can try it on. Make your tax return early, clearly state that the house is a as stated on the link above, and wait for Revenue's response.
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As mentioned in my OP the linked-to property is an example.

The actual house I'm interested in is a 2-storey terraced house with a kitchen, bedroom, bathroom and living room on each floor. There is nothing physically separating the two living areas. Someone could simply walk upstairs from the ground floor living area and arrive on the landing area of upstairs and therefore be in the 1st floor living area.

I'll ask revenue for clarification.
 
Does anyone have experience of splitting a house in two legally? I ask because with some work - building an extension essentially - this would be very viable for me. Are there planning implications?

Lino
 
I'm not sure that this is something that would be recommended, however i'm sure the original poster is not alone in thinking about this approach.

To get into detailed specifics about whether a relief applies on the interpretation of the law is a matter for the trained tax advisors. Its not something that should be done lightly. If the original poster is adamant that this could be done then maybe they should get a professional opinion to see if their instinct is right.

You shouldn't go about purchasing anything on the basis that the rent a room relief will apply without some comfort (from Revenue, an advisor etc) about the applicability of the relief.

Personally, i think it unlikely to apply.
 
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