Resident Landlord

A resident landlord – also known as a live-in landlord – is someone that rents out part of their home to a “lodger”, while also living there themselves. If you’re a resident landlord, you may need to submit a Self Assessment tax return by January 31st each year.

However, if what you earn from your lodger is under £7,500 a year, then you don’t need to declare it or do anything – unless you already registered for Self Assessment in a previous year and didn’t tell HMRC that you don’t need to file a tax return anymore. In this case, you need to submit one even if you don’t have any tax to pay.

If what you earn from your lodger is over £7,500, you can claim this amount as a flat allowance – this is called the “Rent a Room relief”.

How to be a resident landlord

• Property owners do not require permission to rent out part of it to lodger
• If you have an outstanding mortgage, you should seek permission from the mortgage lender
• A long-term leaseholder will need to consult the terms of the lease
• Secure council tenants can sublet part of their property, but only with the council’s permission
• Private tenants are not allowed to sublet unless the terms of their contract explicitly state it
• 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.