Rent-a-room,Moving abroad

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Joeytheboy

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Can anyone help me please!!! I'm moving abroad shortly, I've got a house which I bought 2 years ago, I'm wondering will I be able to rent out my house under the rent a room scheme since it is my only house in Ireland and I think I qualify as an ordinary resident since I have been ordinarily resident in Ireland for over 3 years. I don't want to rent it out fully as I would be liable for stamp duty etc.. any advice would be greatly appreciated.
 
Unless you are being seconded by work to go abroad then most likely you cease to be an owner occupier so cannot avail of the rent a room scheme and if you rent the property out will be liable for a clawback of stamp duty. You should get independent, professional advice if you are not sure baout the technicalities of this situation.
 
well im not going to be working for an irish company, if its a case that i need to spend over 30 days in ireland to be considered resident for tax purposes in Ireland I can do that, but then I'll be liable to pay tax on my earning abroad also but I don't want to do that. I do however wish to be considered ordinarily resident in Ireland i.e I've been living here more than 3 years, then similar to if I was selling my house after moving abroad shouldn't it still be considered my ordinary principal private residence allowing me to rent a room exepmting me from stamp duty?
 
Tax residency has nothing to do with this as far as I know. What matters is your owner occupier status with regard to the property. Except in limited circumstances (such as secondment abroad in work) going abroad for anything other than a holiday means that you are no longer an owner occupier so if you rent the property out you will most likely be classed as an investor. Best to get independent professional advice if in doubt.
 
where would be the best place to get advice, I could ring the revenue department but I've spoken to somebody there before and they didn't seem too sure themselves...
 
ok thanks,,,,maybe if say my brother was living there would I then retain my status as an owner occupier and then he could rent out a room?
 
In some circumstances it may be possible to have somebody live "on your belhalf" in the property but I don't know the ins and outs. To avoid the possibility of deliberately or accidentally engaging in tax evasion it might be a good idea to get professional advice.
 
If you are deemed not to be living in Ireland , and have gone away voluntarily there is no relief under the rent a room schem-under any circumstaces.
In essence the relief is availble to those that rent out a room or two of the house where they normally reside. This has no link to being ordinarily resident -which is a phrase that refers to your tax status only-not where you actually live. You can have no PPR in Ireland and still be regarded as being ordinarily resident in Ireland for a minimum period of 3yrs-whether you come home or not.
The rent a Room scheme cannot apply to you are not actually resident here-i.e. living here! I dont think there is a condition where you can nominate some family member to live there in lieu of you-as it would be open to abuse.
Secondly if you rent out the house and recieve more than the max allowed from the rent a room shceme, you pay tax on all it.
There is also the stamp duty implication if you do not own the property more than 5yrs and are deemed to be renting it out.
As advised you need to get independent advice -which can only com from an accountant. Considering the pitfalls that lie ahead if you get it wrong, a consultation with them will be much cheaper than the financial headaches that await you if you do something that makes you non tax compliant (accidently or deliberately) and are caught.
 
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Thanks alot Laternau, it was a very helpful post, I suppose it is a question of what is deemed to be resident in a house, I mean if I went abroad for 2 weeks holiday, am I resident still resident in my house, if I went abroad for 2 months holiday am I still considered as being resident in my house in Ireland, I'm wondering what is the cut off point whereby due to a length of abscence from my house I am no longer deemed to be resident.
Anyway in the meantime today I've found out that since I bought my house for under 127000 euro 2 years I would not have to pay any stamp duty to rent it out fully, only tax at 20 percent which will be hardly anything, so I will do this after all, but because I'm liable to pay tax on this income does this mean that I'm an Irish tax resident and therefore liable to pay tax on my earnings abroad also(not for an Irish company)?
 
Joeytheboy said:
Thanks alot Laternau, it was a very helpful post, I suppose it is a question of what is deemed to be resident in a house, I mean if I went abroad for 2 weeks holiday, am I resident still resident in my house, if I went abroad for 2 months holiday am I still considered as being resident in my house in Ireland
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Yes - but you are not going on holidays - you are heading abroad to work so you will not be an owner occupier of the property.
Are you sure that only tax at 20 percent which will be hardly anything
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Be careful here. Rental income to a non resident landlord will be subject to 20% tax witheld by the tenant or an agent but the income will quite likely still be assessable for further tax in the country in which you live. Also some portion of the resale gain will most likely be assessable for CGT.

You really need to get independent, professional advice.
 
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