Rent a room Tax relief for occasional use landlord

My daughter works in Brussels and comes back to Ireland every few months. A house has come up at a very good price which she is interested in. She is considering renting a room so the house is being lived in during the periods when she is abroad. And also to generate an income. Would this rental qualify for the €14000 pa tax relief? or does she have to live in the house full time in order to qualify?

Can't see how it would be considered by Revenue as her home when she's living and working full time in Brussels, bar occasional trips to Ireland?

Shes only on a contract that ends in two years and will come home. Who knows what the housing market will be like in 2 years. If she buys and they bring in a vacant property tax, she will be affected. I forgot to mention that. So if she does take a tenant, she`ll pay full tax so? Thanks for your replies.

Ballina said:

She is considering renting a room so the house is being lived in during the periods when she is abroad.

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As others have clarified she is not eligible for rent-a-room relief.

If she is not Irish resident she just pays tax@20% on the rental profits and has the benefit of an Irish personal income tax credit. Mortgage interest would reduce the taxable profit but if only a room is being let then I presume you have to proportionately reduce the mortgage interest being claimed. Others may be able to advise on this. There may also be some Belgian tax liability as well.

If she does this she should make sure her lodger is a licensee rather than a tenant. From the RTB a licensee can be

persons occupying accommodation in which the owner is not resident under a formal license arrangement with the owner where the occupants are not entitled to its exclusive use and the owner has continuing access to the accommodation and/or can move around or change the occupants,

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Thank you Coyote, I never heard of a Licensee. I must check it out. There will be no mortgage, Ill be giving her the money. Thanks again.

Ballina said:

Thank you Coyote, I never heard of a Licensee.

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Ballina said:

There will be no mortgage, Ill be giving her the money.

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Then she needs to watch out for lifetime CAT allowance from you!

A low-interest loan might be more tax efficient. There are plenty of AAM threads on this.

NoRegretsCoyote said:

Then she needs to watch out for lifetime CGT allowance from you!

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CAT?

Thank you for your replies gentlemen. Obstacles at every turn it seems.