Is someone not paying rent liable for tax

[Madhugh]

Not sure if this is in the right forum. My Mother lives with me, her house is empty. Over the last number of years we have let friends (always an established couple) stay in it rent free, different scenarios - being unable to find somewhere to rent, house purchase fell through so in transition, trying to support themselves through college etc. We felt that someone staying in it keeps it from going into disrepair and we feel those we help would end up in the homeless category unless they went and stayed with relatives. My question is is there any tax liability for either party and is there anything wrong with what we are doing.

 

[Gordon Gekko]

In theory, yes. It’s a deemed gift.

The gift is staying there rent-free, so your starting point is the market rent for such a property.

But then you correctly highlight what’s known as a “caretaker discount”, i.e. the benefit to you and your mother of not having the property idle. That’s typically around 25% of the market rent.

Then there the €3,000 per person annual gift tax exemption.

But in reality, unless we’re talking about Ailesbury Road here, Revenue probably wouldn’t be bothered with this sort of stuff.

 

[huskerdu]

Gordon is correct. Unless the property in its current state would rent for a large amount of money, its not an issue.

 

[NoRegretsCoyote]

Gordon is correct. Unless the property in its current state would rent for a large amount of money, its not an issue.

It's also incredibly common. 1% of the population lives in a home rent-free according to the Census and Revenue don't hunt people down.

If your mother starts charging rent she starts building up a CGT liability which she doesn't want either.