Advises on Renting A Room Out In Your Main House
Homeowners who rent out a room to tourists and lodgers have been given a tax incentive.
The Government increased the amount a property owner can earn tax-free in rent to £7,500 a year. It is a victory for the soaring number of homeowners renting spare rooms to holidaymakers and business travellers etc and it will also benefit those who try to boost their household income by renting out an empty bedroom to lodgers.
The rent-a-room tax relief scheme currently allows homeowners who let extra bedrooms in their main residence to lodgers to earn up to £4,250 a year tax-free. From April 2016 they will now be able to earn £7,500 in rent before paying tax on those earnings. The extra allowance is worth £1,300 a year to a higher rate taxpayer, and £650 a year to the basic rate taxpayer. This relief is to encourage people to rent rooms in their main residence and to provide a hot meal.
The government has assessed that there are more than 19 million empty bedrooms in this country and considers this a waste of resources. To qualify for the rent-a-room scheme it must be the homeowner’s main property, and the amount someone can earn a week in rent is capped at £144 a week.
There are an estimated 19 million empty bedrooms in England, according to Spareroom.co.uk. Many properties belong to pensioners who don’t want to move to a smaller property, and empty nesters whose older children have now left home