Renting a room to relative

Limana68

HI there
My nephew has recently moved down to our area after being made redundant and is applying for Uni next year. He is looking for a job until he starts so at the mo is on Job Seekers. The lady at the Job centre mentioned to him about housing benefit but I told him that I dont think he will be able to claim as I am a relative. Is that still the case?
At the mo he living in our spare room in our house( mortgaged)

Thanks for any input

Li

BigAunty

A tenant who lives in the same property as their landlord to whom they are closely related cannot get HB - it is expected they pay towards their keep from their JSA. Here is the definition of close relative.

http://england.shelter.org.uk/get_advice/housing_benefit_and_local_housing_allowance/housing_benefit_if_renting_from_a_family_member#0

Limana68

Thanks for that link, I just looked at the list and it doesn't mention nephew/aunt on there so maybe I am not classed as a close family member.?

pmlindyloo

BigAunty wrote: »

A tenant who lives in the same property as their landlord to whom they are closely related cannot get HB - it is expected they pay towards their keep from their JSA. Here is the definition of close relative.

http://england.shelter.org.uk/get_advice/housing_benefit_and_local_housing_allowance/housing_benefit_if_renting_from_a_family_member#0

I think the 'sticking point' with this is the definition of a close relative since aunt is not included in any list I have seen.

The only thing I can suggest is that your nephew enquires about this.

I do not know whether you would need to produce a lodger's agreement to prove that this is a proper arrangement.

Difficult one.

He would only be entitled to the shared rate if he did receive it.

What sort of financial arrangement have you discussed with him?

Limana68

I dont take anything from him at the mo, he just helps out with shopping when he can , hes hoping to get a job but not easy at the mo. Hes fallen on hard times so feel sorry for him !
I will get him to enquire about it - worth a try.

BigAunty

Limana68 wrote: »

Thanks for that link, I just looked at the list and it doesn't mention nephew/aunt on there so maybe I am not classed as a close family member.?

Yep, AFAIK - I think grandparents are also excluded.

The Direct Gov or local council website will tell you what the maximum Local Housing Allowance rate is for a single room.

princessdon

You would also have to be a "landlord" - Eg run a business, File Tax returns, have insurance, alter your mortage to show this and get permission from your lender or landlord, have a signed agreement, be prepared to evict them and show it is a commercial arrangement and not a "favour to a relative".

BigAunty

princessdon wrote: »

You would also have to be a "landlord" - Eg run a business, File Tax returns, have insurance, alter your mortage to show this and get permission from your lender or landlord, have a signed agreement, be prepared to evict them and show it is a commercial arrangement and not a "favour to a relative".

Lodgers are different from tenants.

Some of what you've quoted relates to the situation when a tenant lives in a separate property away from the landlord. Contrived tenancy is an irrelevancy - the nephew is not a tenant but a lodger, someone who lives in the same place as their landlord.

Lodgers (also known as excluded occupiers) are different, comes under the Rent a Room scheme, so a tax return will depend on rental income.

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnPropertyAndRentalIncome/DG_4017804

I don't know the position on Gas Safety for lodgers.

Helpful info here

http://www.landlordzone.co.uk/lodgers_rent-a-room.htm

enabledebra

He can't get Housing Benefit if the agreement is not on a "commercial basis" (eg if you wouldn't evict him for rent arrears) or if liability has been "contrived" (it doesn't matter whether the liability takes the form of a "tenancy" or not -that's not the wording of the regulations)

In addition to the above links this is a guide to all the legalities etc

http://www.communities.gov.uk/publications/housing/lettingrooms

Limana68

Thanks for all the inputs guys and the links:T