HOMEOWNERS are being encouraged to let out spare rooms in return for a tax break as part of a newly launched scheme to tackle the housing crisis.
Under the government’s ‘Rent A Room Scheme’, homeowners can gain tax relief on rent that they receive for letting a bedroom in their own home from the start of this year, provided the total gross income does not exceed £10,000.
Housing Minister David Warr said: ‘The 2021 Census found that around one quarter of households were under occupying their accommodation, and this initiative is designed to encourage those empty bedrooms to be used.
‘The scheme builds on the current tax treatment of lodger income and I am confident that it will lead to an increase in accommodation for people seeking somewhere to stay for a relatively short time. That might be foreign language students, or workers in Jersey for short-term contracts, or Islanders who just need a bedroom.’
He added: ‘Whoever it is, they are likely to feel more welcome, and more in touch with Island life, if they’re staying in someone’s home.’
The scheme was previously welcomed by St Brelade’s College, an organisation which has managed the placement of overseas students in local homes for around 45 years.
Sid Brown, principal of the college, said: ‘In our experience, many prospective hosts are deterred by the fact that they have to declare and pay tax on the income, possibly because they are scared they may fall foul of the tax department and are often unaware that there is a 50% reduction in the tax rate if they provide meals.
‘In simple economic terms, the fewer home-stay places we have, the fewer students will come to Jersey resulting in less income for local households, teachers and suppliers not to mention airline and ferry operators. In our view, this scheme will result in a net gain by increasing capacity while at the same time eliminating the totally unnecessary administrative costs of overseeing this tax.’
For more information visit ‘Renting a room in your home’ on the government website.
