Rent a room scheme

S

Sago

Registered User
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Hi

Just wondering, in regards the rent a room scheme if you go over the exemption mark of 7,620.00 are you subject to tax on the balance over or the full value of rental income received. ie. If you receive 9,000.00 in rental income under the rental a room scheme are you subject to tax on 1,380 or on the full 9,000.00

Thanks
 
Bacchus is right - 1 cent over €7620 p.a. and you'll be liable to income tax on the full amount however you may be able to offset some of your mortgage interest and other expenses against the rental income. You also may be liable to CGT when you sell the house. Check with the revenue.

Sarah

www.rea.ie
 
Just FYI, you do not lose your CGT exemption on the sale of your PPR if you have been availing of the rent a room scheme. And I can also confirm that Baachus, Clubman and Sarah are correct about your initial query.
 
Thanks for your responses guys its useful to know that. I did the accounting technician course and it was never stated as far as I can recall what happened if you made over €7620 from rent a room.
 
What accounting technician course? Maybe it doesn't focus/specialise in tax matters? Are you asking about this from your own personal point of view or from the point of view of dealing with the tax matters/returns of others? If it's the latter (and even if it's the former) you should really make sure that you double check all details before possibly acting on incomplete or erroneous knowledge of tax matters.
 
Hi Clubman, the query was originally from me (Sago)

Can you just clarify - Do I have to confess ALL the rental income to the Revenue!!!!!
 
Sago said:
Hi Clubman, the query was originally from me (Sago)
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Oops - sorry.
Can you just clarify - Do I have to confess ALL the rental income to the Revenue!!!!!
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I presume you mean declare not confess? But the answer is yes - you need to declare all rental income (including tax exempt rent a room income) to be tax compliant.
 
No, I don't believe it would. That's precisely what I'm doing with my own house.
 
Sarah - you were saying earlier about offsetting my interest relief - can you tell me some more about that?

Thanks again guys.
 
Sarah W said:
Bacchus is right - 1 cent over €7620 p.a. and you'll be liable to income tax on the full amount however you may be able to offset some of your mortgage interest and other expenses against the rental income. You also may be liable to CGT when you sell the house. Check with the revenue.

Sarah

www.rea.ie
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Sarah was presumably referring to the situation in which the rent a room scheme does not apply (e.g. more than €7,620 p.a. in rental income) and the property is classified as a normal investment property with all that this means for taxation etc. Investors can offset 100% of mortgage interest and other allowable expenses against rental income. I don't think that this applies to owner occupier's availing of the rent a room scheme though since if they earn €7,620 or less then there is no tax anyway.

Sounds to me that you are confused enough to need independent, professional advice to be honest.
 
Not that confused now - just trying to get some advice on how much rent to charge, that's all.
Don't want to loose any profit I make to the Revenue.
 
Hi - are you sure even if your under the threshold you need to inform the revenue ? (Most ppl I know dont !!) Ta.
 
where an individual rents a room (or rooms) in a “qualifying residence” and the gross rent received, including sums arising for food, laundry or similar goods and services and the income does not exceed €7,620 this income will be exempt from income tax by including it in the individuals tax return.
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(Extracted from here [broken link removed] )

So yes, to be properly tax compliant you would need to declare it.
 
If they are owner occupiers then yes. I suspect that the €7,620 limit still applies and it's not 2 x €7,620 or anything like that. Why do you think that joint buyers would affect this?
 
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