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Rent a room scheme

I am a landlord, what do i need to consider when renting out a room in my home?

Sharing or renting a room has become more popular as more people struggle to afford private rented accommodation or a mortgage.  From the landlords point of view it helps to pay the rent or mortgage.  A lodger may be able to secure an improved property if it is the landlord’s home as well as a lodger and it is often cheaper than renting a property on your own.  

From 6 April 2016 if you rent out, or are considering renting out a room in your home you can get up to £7,500 tax free income.  This is due to a government scheme called ‘Rent a Room’ designed to encourage people to take in lodgers.

What you have to do:

  • You let out a room or part of your main property (it can be a whole floor but not a self-contained flat)
  • It must be furnished (unfurnished rooms do not qualify)
  • You do not have to be a home owner.  If you have your landlord’s consent you can take advantage of the scheme as a tenant
  • If you do not normally fill out a tax return and the income is below £7,500 (around £625 per month) you do not even have to do anything, the exemption is automatic.  If the amount you earn is above, just let the tax office know
  • If you usually fill out a tax return, first consider whether you are better off in the scheme or not
  • If you are unsure you should seek advice from a qualified person

More details of room sharing, the rent a room scheme and taking in a lodger can be found via the following links:

Last updated Tuesday, 25th February 2020

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