PPR rent a room & investment property owners

C

ClubMan

Registered User
Messages
49,236
This thread just sparked a thought - is there no restriction on rental/investment property owners availing of the rent a room scheme in respect of their PPR? If not does anybody feel that there should be?
 
This definition (from a Revenue document on stamp duty) would seem to indicate that it's okay.

Who is an Owner Occupier ?

An Owner Occupier is a person who purchases a new house/apartment which is to be occupied by the purchaser, or a person on his behalf, as his only or principal place of residence and no rent, other than rent under the rent-a-room scheme, is derived from the property for a period of five years from the date of the purchase.

Who is an Investor ?

An Investor is any person who does not qualify for First Time Buyer or Owner Occupier reliefs as that person (or persons in right of the purchaser) will not occupy the property as their only or principal place of residence and rent received, if any, is not under the Rent-a Room scheme. Investors acquiring new and second hand residential property are subject to the full rate of stamp duty as shown in Table 1 and 2.

What is the rent-a-room scheme ?

Under this scheme there is no clawback of the First Time Buyer or Owner Occupier reliefs where rent is received by the person in occupation of the house, on or after 6 April, 2001, for the letting of furnished accommodation in part of the house.
Click to expand...

On a slight aside but also prompted by that thread, I wonder how many people declare and pay tax on their rental income. I get the impression that many people think that the rental income pays the mortgage and that's that. I think it's another manifestation of the fact that most people desperate to invest in property have fairly poor understanding of the implications...
 
In the context of a 'principal private residence' of which you can only have one, there is no 'occupational' stigma to this. So even Michael O'Leary would be entitled to the relief, provided he had somebody in the house. Most dont have people in their houses, and those that do generally need to have. I think all it did was regularised an existing situation, without the now established 'look back' that the Revenue thinks is the way to do business.

As regards Rental Income, I agree that many many not make returns. The Revenue are penalising people 'goodoh' that declare late.
 
WizardDr said:
In the context of a 'principal private residence' of which you can only have one, there is no 'occupational' stigma to this.
Click to expand...
Can you explain "occupational stigma" because I don't understand the term.
So even Michael O'Leary would be entitled to the relief, provided he had somebody in the house. Most dont have people in their houses, and those that do generally need to have. I think all it did was regularised an existing situation, without the now established 'look back' that the Revenue thinks is the way to do business.
Click to expand...
Fair enough - I was just wondering and not necessarily making any value judgement of my own on the matter.
As regards Rental Income, I agree that many many not make returns. The Revenue are penalising people 'goodoh' that declare late.
Click to expand...
Does this mean that most tenants don't bother claiming rent relief or that Revenue don't bother chasing tax evading landlords diligently enough?
 
Tongue in cheek comment - the rent a room relief is available to any owner occupier.

I would think many with rental properties are not aware of what they are entitled to claim. Though the Revenue have a useful guide. They have no such document for foreign properties. These can be problematic if they are rented out and used by the owner.

Not sure how many claim their entitlements to rental relief.
 
WizardDr said:
Not sure how many claim their entitlements to rental relief.
Click to expand...

Not many I would think. I've been pointing out the availability of this "free money" to my collegues for two years now, and still only a small fraction of them have actually claimed it. (And they're Software Engineers, so supposedly reasonably bright people!!)

Then of course you've got the other camp who will accept a reduction in their rent from the Landlord, rather than claim the tax credit.
 
I don't really see any merit in the idea of introducing restrictions to the Rent a Room scheme as floated above. The Rent a Room scheme has worked because unlike most other tax schemes it is relatively simple and understandable. This would cease to be the case were any arbitrary qualifications introduced as to who could or could not avail of it.

These qualifications would almost definitely give rise to inconsistencies and uncertainties as to eligibility - for example would the "property owners" prohibition extend to owners of foreign property? Or owners of non-residential property such as commerical units or agricultural land? There would also be considerable issues in policing this whole area, to the extent that it would probably be easier for the authorities to scrap the entire Rent a Room scheme rather than involve themselves in a whole battery of audits to ensure compliance with its rules.

On the other hand, I can't imagine that there is much to be gained by restricting eligibility to the Rent a Room Scheme. In general I would have thought that the more people are encouraged to avail of it, the more society will gain. Or maybe I'm missing something?
 
ubiquitous said:
I don't really see any merit in the idea of introducing restrictions to the Rent a Room scheme as floated above.
Click to expand...
Who floated the idea of restrictions?
 
ClubMan said:
More sarcasm!? :D
Click to expand...

No offence to your good self intended :D

They can see the taxman making off with their money, but any sniff of paperwork sends them running. :rolleyes:
 
I honestly don't see the distinction. If it is important to you, read "questioned" for "floated" in my post above. Then maybe we might sometime get around to discussing your question/idea
 
Who is an Owner Occupier ?

An Owner Occupier is a person who purchases a new house/apartment which is to be occupied by the purchaser, or a person on his behalf, as his only or principal place of residence and no rent, other than rent under the rent-a-room scheme, is derived from the property for a period of five years from the date of the purchase.
Click to expand...

Can anyone clarify "a person on his behalf"
Is there any restriction to who this applies to?
If I buy a house and let a friend or relative live in it rent free (genuinely rent free now, not just saying it is) does this qualify the house as my PPR as long as I have no other PPR?
 
Afaik your PPR is the place where you live, be it owned rented live with parents etc.
 
Asdfg, there are provisions in the tax legislation whereby a person can occupy a house on your behalf, this is what I am inquiring about. The quote originally posted by Woser is from the Revenue website about FTB and owner occupiers and clearly states that a person can occupy the house on your behalf. I am interested to find out in what circumstances this applies.
 
You must log in or register to reply here.
Back
Top