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My son is living rent free in an apartment owned by me. Is

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My son is living rent free in an apartment owned by me. Is there any tax liability for either party?
Submitted: 2 years ago.
Category: Tax
Expert:  TaxRobin replied 2 years ago.
Hello,
Unless you, the landlord charges a full market rent for a property (and imposes normal market lease conditions) it is unlikely that the expenses of the property are incurred wholly and exclusively for business purposes. So, strictly, they can’t be deducted in arriving at rental business profits.
If you let a property below the market rate to a relative (as opposed to providing it rent-free), you can deduct the expenses of that property up to the rent you get from it. This means that the uncommercially let property produces neither a profit nor a loss, but the excess expenses cannot be carried forward to be used in a later year.
When a property is occupied rent free, it is completely outside the property income regime.
The son would not be receiving a taxable housing benefit if he is not employed by the parent.
TaxRobin, Tax Consultant
Category: Tax
Satisfied Customers: 14496
Experience: International tax
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