The government is considering a major change to the 1992 Rent A Room tax exemption, which lets homeowners with extra space earn up to £7,500 a year tax free by renting it out. The potential changes would, if implemented, restrict the tax break only to owners who rent out only part of their property, and not the whole thing, because the Treasury deems owners who rent their whole properties as being similar to commercial landlords. Such a change could force Airbnb hosts to pay significantly more in taxes.
Key Takeaways:
- UK authorities launched the Rent A Room Relief incentive program in 1992 as a way to up the quantity and quality of low-cost housing available.
- Home-owners can earn up to seven-thousand five-hundred tax-free pounds annually, when they rent a room, or a property.
- The current system may be slated to shift, as it seems the government is now only interested in reimbursing renters that offer a portion of their property.
“The government has suggested that it is at least considering changing the terms of its Rent A Room system which could mean ?hosts? letting via Airbnb and similar platforms could end up paying more tax than they do now – if they pay any at all.”
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