rent a room

Rent a room to earn income and save tax

It appears most countries across Europe now have a scheme whereby you can rent a room in your house and the income earned is tax-free up to a threshold.

This is certainly something worth considering as many countries charge a crippling tax rate for rental income or for many people the extra income pushes them in a higher income tax rate. Effectively this means they may be paying back almost half the extra income in tax.

The scheme can only be used when you rent a room within your family home and not when the home has been converted into separate flats.

In this situation you are considered a commercial landlord. The worry for many people is what kind of tenants they will secure.

There are many horror stories of students renting a room and making life a misery for the landlord with the family home. Conversely the majority of people have a very positive experience with students (of course the rent a room scheme is not for students only).

People renting a room need to ensure they run background checks to match those carried out by letting agents. Also previous references need to be acquired and contacted one by one. Once the bases are covered any tax saving incentives are surely worth making use of.

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