The rental market is tough right now. Affordable homes feel scarce, and inflation over the
last few years has pushed living costs through the roof. But there is a way some
homeowners can ease the pressure — both for themselves and for someone looking for a
place to live.
Enter the Rent-a-Room scheme.
- If you’ve got a furnished spare room in your main home, you can rent it out and earn up to
£7,500 per tax year tax-free. - If your total rental income is at or below £7,500 and you don’t already file a tax
return, you don’t need to do anything — the relief is automatic. - If you earn above the threshold, you’ll need to file a Self-Assessment and then
choose whether to opt into the scheme (keeping the £7,500 allowance) or pay tax on
your actual profit. - If you share ownership of the home, the allowance is usually split (e.g. £3,750 each).
To put it in perspective: £7,500 per year works out to about £625 per month tax-free. That’s
a big help with rising bills, and at the same time, it offers someone else a reasonably priced
place to live.
✅ Quick checks before you dive in:
- The room must be furnished.
- It has to be part of your only or main residence.
- If you rent or have a mortgage, check permissions and insurance cover first.
Feels like a rare win-win in the current housing market — extra income for you, and an
affordable room for someone else.
❓Could your spare room be someone’s affordable home — and a boost to your
budget?
If you’re unsure about the tax implications, or want to make the most of the Rent-a-Room
scheme, our team at Jupps Accountants can help you navigate the rules and make sure
everything is set up correctly.
More details on the HMRC website: Rent-a-Room Scheme – GOV.UK