Buying apartment for child student/let a room?

Hi, I am buying an apartment for my child who is a student at university. It's a two bedroom apartment. I've just read another thread where someone is suggesting that it could become my child's PPR and they could rent out the second bedroom under the rent a room scheme. This would be ideal as it would give her spending money and as there is no rent, it would reset for RPZ ( it is in an RPZ zone).

I would like everything to be above board however, so wondering if anyone can shed any light on this.

Its exactly as you have posted.

DannyBoyD said:

Its exactly as you have posted.

Click to expand...

Thanks for your reply.

DannyBoyD said:

Its exactly as you have posted.

Click to expand...

Is it?

I wouldn't be so sure without knowing more of the facts if this particular situation. The OP should get robust legal advice on this before proceeding with any plan of this nature.

A tenant can avail of the rent-a-room scheme, they do not need to be the owner of the property.

A parent can support their student offspring; it is not a taxable 'gift'.

IANAL

DannyBoyD said:

A tenant can avail of the rent-a-room scheme, they do not need to be the owner of the property.

Click to expand...

Strictly only if it is their PPR.

We know nothing of this student's circumstances, intentions or priorities, for example whether they envisage themselves living in this property in the summer months, and whether their college course involves for example a year to be spent overseas.

Giving broad brush advice without making at least some attempt to at least recognise inherent uncertainty is reckless and in the real world would probably culminate in an advisor being sued for negligence.

It sounds like it could work but before you do anything make sure your child's future living arrangements comply with the definition of PPR. If they don't then there may be tax implications for them. It might also invalidate the license agreement and whoever rents the room may be entitled to claim it is in fact a tenancy.

Below is a link to what Revenue have to say on the rent-a-room scheme/PPR.

This is a tax question not a legal question. I have researched this too and came to the same conclusion...I would suggest though that you adhere to the absolute letter of the law if attempting this, especially in relation to ppr eligibility, gift tax exemption eligibility and any gifts your child might give to you during this period which might be considered tax evasion if the original source of thr funds is the rent under rent a room.

misemoi said:

This is a tax question not a legal question.

Click to expand...

No, the question of how to define principal private residence and more particularly how to interpret it with reference to a given situation is a legal one, likely to rest as much on relevant case law as on legislation.

T McGibney said:

advisor being sued for negligence.

Click to expand...

This is the internet.

Good questions above from T McGibney. There wont be any 'gifts' coming to me- I envisage any rent a room money going into a separate account in my child's name- I feel it is best to keep it very clear and, after paying for management fees, LPT, utilities, insurance, I doubt there will be anything in that account! But the time abroad is a good question too- I don't know the answer to that yet, there is an option in my child's course for a work placement or time abroad but no decision to be made on that for a while. Likely they'll live there year round otherwise, apart from a few visits home at weekends due to a part time job there. Food for thought though.

I looked on the Revenue website after the advice above and it does say that to claim rent a room relief you do not have to be the owner of the apartment.