Taxable House?!

Progressive · 13 August 2004 at 9:13PM

I've been unemployed for a couple of years & moved back in with my folks, during which time i've been claiming JSA.
My parents have decided to sell their house & move into a smaller flat, & have generously offered to buy a place for me with some of the proceeds.

I am unsure if i could claim housing benefit if i am not paying any rent. If such a claim is allowed, can it be affected by the size (no. of bedrooms) of the property?
I am intending to let out a room, does that also prevent you from claiming housing benefit? And until i regain employment, could i expect any council tax / utilities-related benefits? Finally would the JSA be stopped or would the rent income have to exceed a certain limit first?

I will be visiting the CAB for some advice but was hoping for some quick answers, many thanks in advance...

trafalgar_2 · 13 August 2004 at 9:25PM

You won't get housing benefit if you aren't paying rent ............as you will own the home,you won't be paying rent ::)

Not sure about the others but someone else will know....................I'll have a look and see what I can find

Ted_Hutchinson · 13 August 2004 at 9:57PM

You may find these guides useful
A guide to Housing Benefit and Council Tax Benefit (RR2 Apr 2004)

A guide to Income Support (IS20 Apr 2004)

If your parents bought the house in their names and rented it to you through a formal rental agreement then a claim for housing benefit would be possible though you would have to demonstrate that it was a commercial agreement. If there is no rent or no rental agreement then there would be no housing benefit.

The question of treatment from income from lodgers is dealt with in the above guide from which I quote
Income from subletting and taking in lodgers
If you sublet part of your home to a tenant, part of this income is ignored. The amount ignored is higher if you provide heating for your tenant. The current rates of disregards can be found in leaflet GL23 Social security benefit ratesIf you receive money from lodgers or boarders, the first £20.00 a week income plus 50% of the balance from each lodger is ignored in full. A lodger is someone who pays you a charge for their accommodation and at least some cooked or prepared meals.
If you receive payments from other people who live in your home for their living costs and accommodation, for example, from an elderly relative, these payments will not be counted in your income though there may be a non-dependant deduction from a payment of Income
Support housing costs.

iklepig · 21 August 2004 at 2:15AM

You may find these guides useful
A guide to Housing Benefit and Council Tax Benefit (RR2 Apr 2004)

A guide to Income Support (IS20 Apr 2004)

If your parents bought the house in their names and rented it to you through a formal rental agreement then a claim for housing benefit would be possible though you would have to demonstrate that it was a commercial agreement. If there is no rent or no rental agreement then there would be no housing benefit.

The question of treatment from income from lodgers is dealt with in the above guide from which I quote
Income from subletting and taking in lodgers
If you sublet part of your home to a tenant, part of this income is ignored. The amount ignored is higher if you provide heating for your tenant. The current rates of disregards can be found in leaflet GL23 Social security benefit ratesIf you receive money from lodgers or boarders, the first £20.00 a week income plus 50% of the balance from each lodger is ignored in full. A lodger is someone who pays you a charge for their accommodation and at least some cooked or prepared meals.
If you receive payments from other people who live in your home for their living costs and accommodation, for example, from an elderly relative, these payments will not be counted in your income though there may be a non-dependant deduction from a payment of Income
Support housing costs.

Can I just ask for clarification please?

What i understood was that if you rent from a 'close relative' you cannot claim housing benefit. Could someone please explain the ''commercial agreement'' part and explain how you can demonstrate this?

thanks

Fran · 21 August 2004 at 3:18AM

iklepig,

If you look at Ted's link:- "Housing Benefit and Council Tax Benefit", it tells you who can and can't claim housing benefit.

Progressive,

Did you read Ted's links? The problem you may well have is proving that the arrangement has not been set up to take advantage of housing benefit. You would have to check, eg. with Citizens Advice or another welfare benefits adviser to be sure of your exact situation.

Progressive · 25 August 2004 at 4:00PM

Hiya, & thanks for the replies.
I saw Ted's links & have downloaded the documents. (Its quite a lot of reading: 140 & 160 pages respectively! ) :P

Fran, you said:
"The problem you may well have is proving that the arrangement has not been set up to take advantage of housing benefit"

...this only applies if they are planning to charge me rent, right? That won't be the case, the house will be in my name & i understand now that i have no reason for claiming housing benefit. I'm really not out to take advantage of the system, i just want to ensure that i'm not taking on a house i may not currently be able to afford.
I'm still unclear if i can continue to claim JSA if recieving rent from a lodger. It looks like i can? It seems like the JSA & rent would be totalled (as income) & taxed at the appropriate rate?

Fran · 25 August 2004 at 5:38PM

Progressive,

Have a look here:- Ferrett - Benefit Rates and have a look at "Income Disregards".

As it appears that you will have some of your income disregarded, it could be the case that they will look whether you have arranged this so that you can receive extra income by having an income disregard.

Taxable House?!

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