The short version: A live-in landlord (or resident landlord) rents out a room in their own home to a lodger. You share the property with your tenant rather than renting out a separate place.
What’s the Rent a Room scheme?
If you’re a live-in landlord, you can earn a set amount tax free each year from renting out a room. Check gov.uk for the current threshold. If your rental income stays below this, you don’t need to declare it or pay tax on it.
This only works if the room is furnished and in your main home. It doesn’t apply to separate flats or properties you don’t live in.
Do you need permission?
If you own your home outright, you can rent out a room without asking anyone. If you have a mortgage, check with your lender. Leaseholders should check their lease. Council tenants usually need permission. Private tenants generally can’t sublet without their landlord’s agreement.
What about the lodger’s rights?
Lodgers have fewer rights than tenants in a separate property. You don’t need to protect their deposit in a scheme. You can give them reasonable notice to leave. It’s still worth having a written agreement covering rent, notice periods, and house rules.
Thinking about taking in a lodger? Ask us how it affects your tax.
