Any tax issues with letting someone stay in your house rent-free?

[Pia Bang]

A guy buys a bungalow (stamp duty etc paid as not a first time buyer or owner occupier) and intends to convert it to suitable living premises for his elderly father (at the moment the father is living in 2-storey house which is unsuitable as he is not very mobile). He intends to let his father stay there rent-free for as long as he wants.

Are there any tax issues to be aware of? Would revenue find it suspicious that he was not gaining anything from the house, although it is an asset?

Bills would probably be in his father's name, because as a pensioner he would be entitled to discounts for ESB, phone etc.

Thanks,
Pia Bang

 

[DB74]

Nothing suspicious about this at all.

In fact, there are Revenue provisions for this circumstance whereby, provided certain criteria are met, this house will actually qualify for Principal Private Residence Relief when he sells it.

 

[advisor]

Just to ensure there is no comeback, make a claim for Dependent Relative allowance for your father via Revenue.

 

[Pia Bang]

Thanks for this info - I thought this would be the case but for some reason he thought that there could be tax issues.