Renting Out a Room

You may not have a whole property to let, but what about a spare room?

Many people are in one sense 'leaving money in the table' in that if you have a spare room that is not being used, then you could be earning some income by renting it out.

Indeed, in the UK you are currently allowed to earn up to Ł4,250 a year through renting a room in your house without tax (yes, one of the very rare forms of tax free income).

Of course, you do have the downside of having someone else living there, but if you get on with that person then it can be both enjoyable and earn you income. If you live on your own, for instance, and have a two or three bedroom house and that room is going spare, then it certainly is worth considering renting out the room, particularly if that cash would come in handy, as no doubt it would for most people.

The scheme is a government one that goes under the name of Rent A Room, and the tax break is there to try and incentivise people to take in a lodger.

To qualify for the scheme, you must be letting a room (or rooms) of your home that are connected to the house, in other words it can't be isolated from the main property. The room must also be furnished. If you don't do a tax return and earn less than the threshold amount above then you don't need to anything, if you earn above that level of rent then you will need to contact the tax office so you can declare income above that threshold for taxation.

One interesting point is that if you rent a property from a landlord that has a spare room then you can still do this, as you don't even have to the homeowner - although you will need to have the agreement of the landlord to do this, and they may object, but it can't hurt to ask!

So the Rent a Room scheme may be worth considering, depending on your circumstances.

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