A live-in landlord (or resident landlord) is someone who rents out a room of their own home to a lodger. You are not a live-in landlord if any of the following apply to you:
To be a live-in landlord, you must be using the property as your only and principal home throughout the duration of the letting.
Agree terms of a licence with your lodger and have these written and signed for reference.
Specify the basics, such as the length of the contract, when the rent is due and the notice period. The lodger’s licence can run on a month-to-month basis. It can go for a longer term with a break clause included. Decide whether to include the utilities as part of the rent or as a separate charge.
If you were previously living alone and enjoyed a 25% discount on council tax, you will now have to inform the council that you have a lodger and begin to pay the full rate.
However, if your rental income over a 12-month period amounts to under £7,500, this is tax-free as part of the government’s Rent a Room Scheme.
Anything over this threshold will mean you have to file a Self Assessment tax return, but your tax bill can still be reduced by claiming property expenses.
Live-in landlords who claim the Rent a Room allowance cannot also claim expenses. You can decide for yourself which is more cost beneficial.
If the lodger claims housing benefits, these are paid directly to the lodger. If they cannot manage their finances or their rent is in arrears for a substantial length of time, the live-in landlord may request direct payment from the local authority.
Of course we can! We know that as a live-in landlord it can be confusing to handle your own accounts and tax records, so contact our experts for advice and support today!
If you are a live-in landlord, remember to file your Self Assessment by 31st January the year after the tax year you’re paying for. For example, if you’re paying your 2023/2024 tax return, this should be paid by 31st January 2025.