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Rent-A-Room tax free rental still popular even in age of Airbnb

The total value of tax relief declared as a result of the government’s Rent a Room Scheme has soared 187 per cent in the past decade or so. 

An analysis of government data by property management service Houst suggests that a record £140.5m was declared over the 2018/19 period, up from £48.8m back in 2008/09. 

The Rent a Room scheme is designed to assist those renting a space in their primary residence allowing them to take in a lodger and earn up to £7,500 a year tax free. The current maximum value of relief under the scheme has changed significantly in the same 10 year period, jumping from a previous threshold of £4,250 to the current level in 2016/17.


Houst says a significant factor driving the surge is likely to be the incentive of a tax-free income of up to £7,500 a year and what it believes is a willingness amongst more people to develop a ‘side hustle’ - another stream of income, whether through taking a lodger of hosting short let stays. 

Tom Jones, chief commercial officer at Houst, says: “Given enormous economic uncertainty, people are increasingly viewing personal assets as a vehicle to drive up their incomes by turning their homes into money making properties.” 

He says that the pandemic - which is not covered by the government tax figures - may have accelerated this trend as many will have reconsidered their living arrangements and their finances.



“The pandemic has especially given second-home owners pause for thought, forcing many to debate the next step for their properties. With an anticipated surge in demand expected from staycationers at coastal resorts across the country this summer, second-home owners are uniquely placed in being able to prop up the shortfall left by traditional accommodation by renting out their properties” he adds. 

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    This 7.5k tax dodge should be banned, or at most kept only where a long term lodger is given a long term home. It should not be used for airbnb tax free earnings which undercut legitimate highly regulated proper hospitality businesses and blight residential areas with noisy unsafe party flats etc.


    Not at all. In fact £7.5 tax threshold needs to be increased.
    It helps many elderly, or lonely people who may have circumstantially ended up with a few spare rooms but are unable to sell/relocate elsewhere. It helps for them to earn an income, keeps their minds busy, provides for their family, and keeps a person off streets at a lower cost, and if the home owner is lucky to get a longer term bnb guest then it combats the loneliness and reduces resultant mental health issues as well = saving NHS.
    Rent a room certainly helps many people utilise their home, and provide a roof over others without risking the generation rent scrupulous tenants in the property, and face unfair legal costs for long and stressful evictions.
    Best wishes to Rent a room users, just about the only good thing done by HMRC to help poor home owners, NHS and renters.


    I'm happy for it to be used for long term lodger who are given a home, but not for short term holiday lets.

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    So 2 regular LL’s that I usually love to agree with, but on this we have opposing views naturally enough given the unfair treatment of private LL’s.
    I agree with Robert on this one no offence to A,B. LL’s are giving no break whatsoever but hammered in every way possible no allowance for anything now really just penalties. The two way mentioned above extra money Stream & AirBnB as said, other ways its distorting unfairly its used as a cover by some to have a number of renters as lodgers all Regulation and income exempt. Why would it be any surprise if tax exempt money declared has risen, probably useful for people who don’t have a Lodger, to claim it as cover for other income. I think its akin to when our 10% wear & tear allowance was removed, everyone was claiming it when huge numbers were letting unfurnished & not entitled to, ruined it for genuine LL’s supplying everything.


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