Rent-a-Room threshold 'should be higher'

Thursday, November 12th 2009

The National Landlords Association (NLA) has called for the tax threshold on the Rent-a-Room scheme to increase from £4,250 to £9,000 a year.

According to NLA chairman Dave Salusbury, some potential live-in landlords may be put off renting a spare room to a tenant because of the "hassle factor" of filling in a self-assessment tax form.

Under the current scheme, those who let a furnished room in their home to a lodger can receive up to £4,250 free from tax each year, or £2,125 if the let is held jointly. It does not apply to separate flat conversions or unfurnished rooms.

Mr Salusbury called on chancellor Alistair Darling to increase the threshold in line with rising rents - figures from the NLA indicate that while the threshold has not been changed since 1997-98, rents during this time have more than doubled.

"It is a win-win situation that helps both parties and it is about time the exemption reflected the increase in market rents," Mr Salusbury said.