Fair Deal Scheme & Renting Your Property While in Nursing Home Care
Can You Rent Out Your Home While Receiving Fair Deal Nursing Home Support?
If you or a family member is moving into long-term nursing home care under the Fair Deal Scheme in Ireland, one of the biggest decisions can be what to do with the family home.
Leaving a property vacant can result in ongoing insurance, maintenance, security and utility costs. For many families, renting the property while the owner is in nursing home care can provide regular income, keep the property occupied and ensure that the home is professionally maintained.
Importantly, changes to the Fair Deal Scheme mean that, subject to the relevant conditions, 100% of the rental income from a person's principal private residence can be excluded from the Fair Deal financial assessment.
At Positive Property, we can assist owners and their families with preparing, letting and professionally managing a property while the owner is receiving long-term nursing home careFair Deal Rental Income Exemption – How Does It Work?
The Nursing Homes Support Scheme, commonly known as the Fair Deal Scheme, financially assesses a person's income and assets when calculating how much they must contribute towards nursing home care.
Ordinarily, income such as pensions, investments and rental income can form part of this assessment.
However, where a person receiving Fair Deal support rents out their principal private residence, they can apply to the HSE to have the rental income from that home excluded from the Fair Deal financial assessment.
The applicable assessment rate for qualifying rental income from the person's principal residence is 0% rather than the 80% normally applied to other income.
This can make renting the family home considerably more attractive for people entering long-term residential care.Can You Keep 100% of the Rent?
Yes. Since 1 February 2024, a qualifying person receiving support under the Fair Deal Scheme can apply to have 100% of the rental income from their principal private residence disregarded for the purposes of their Fair Deal financial assessment.
This means that renting the family home does not automatically result in 80% of that rental income being used when calculating the person's nursing home contribution.
The exemption relates specifically to the person's main home or principal private residence.
Rental income from other investment properties is treated differently under the Fair Deal financial assessment.What Are the Requirements?
To apply for the Fair Deal principal residence rental income exemption, the HSE generally requires evidence relating to the property and tenancy.
This includes:
- - The RTB registration approval letter
- - A copy of the tenancy agreement showing the rent and commencement date
- - The person's latest Notice of Assessment from Revenue, where applicable
- - Details of the property being rented
- - Details of the monthly rental income
- - Confirmation that the property was the person's principal private residence
- An application is made using the HSE's Principal Private Residence Rental Income Application Form.
Where a tenancy is required to be registered with the Residential Tenancies Board, the appropriate RTB registration should also be completed.
There can be circumstances where an RTB registration exemption applies, and the HSE states that an application for the rental-income exemption may still be considered where a property is not RTB registered- TIs Rental Income Still Taxable?
This is an important distinction.
The Fair Deal rental income exemption is not the same as a tax exemption.
Rental income from an Irish residential property is generally taxable and must normally be declared to Revenue. Allowable rental expenses and any available tax reliefs may reduce the taxable rental profit.
Owners or their representatives should therefore obtain appropriate tax advice regarding:
- - Income Tax
- - USC and PRSI where applicable
- - Allowable landlord expenses
- - Residential Premises Rental Income Relief, where applicable
- - Local Property Tax
- - Tax-return requirements
What Happens to the Value of the Home Under Fair Deal?
The treatment of rental income should not be confused with the way the property itself is assessed as an asset.
Under the Fair Deal Scheme, a person's home can form part of their financial assessment.
The standard asset contribution is calculated at 7.5% per annum, subject to the scheme's asset disregard.
However, the principal residence benefits from the Fair Deal three-year cap.
This generally means that the contribution based on the value of the person's principal residence is applied for a maximum of three years.
For a single person, this can mean a maximum assessment of 22.5% of the property's relevant value over three years, subject to the detailed rules of the scheme.
Different calculations apply to couples.
Renting the property does not in itself remove the three-year cap applying to a qualifying principal residence.Why Rent the Property Rather Than Leave It Vacant?
A family home may potentially remain empty for several years after its owner moves into nursing home care.
A vacant property can create significant ongoing costs and risks.
Renting the property can provide several advantages.Generate Monthly Rental Income
The property can produce a regular source of income which can help meet personal expenses, property expenses or other costs.
Where the HSE rental-income exemption applies, the rental income from the person's qualifying principal residence can be excluded from their Fair Deal financial assessment.
Keep the Property Occupied
Long-term vacant properties can be more susceptible to:
- - Damp
- - Leaks
- - Heating failures
- - Security problems
- - Undetected maintenance issues
- - Deterioration through lack of use
Cover Property Costs
Rental income may assist with expenses such as:
- - Property insurance
- - Local Property Tax
- - Repairs and maintenance
- - Mortgage payments
- - Management costs
- - Safety certification and compliance work
Retain Ownership of the Family Home
Some families may not wish to sell the property immediately.
Renting can allow the owner to retain the asset while generating income from it.Professional Property Management for Families Using the Fair Deal Scheme
Managing a rental property can be difficult at the best of times.
Where the owner is elderly, in long-term residential care or no longer able to personally manage a tenancy, having an experienced managing agent becomes particularly important.
Positive Property can manage the entire letting process on behalf of the property owner or their authorised representative.
Our service can include:
- - Rental valuation
- - Advice on preparing the property for letting
- - Professional advertising and marketing
- - Tenant enquiries and viewings
- - Tenant referencing
- - Preparation of the tenancy agreement
- - Collection of rent and deposit
- - RTB registration
- - Rent collection
- - Property inspections
- - Maintenance coordination
- - Tenant communication
- - Rental statements
- - Rent reviews
- - Management of tenancy issues
- - End-of-tenancy inspections and deposit administration
This provides the owner and their family with a single professional point of contact throughout the tenancy..
Who Can Arrange the Letting If the Owner Is in a Nursing Home?
This depends on the circumstances of the individual property owner.
The person instructing a letting agent must have the appropriate authority to deal with the property.
Depending on the circumstances, this could include:
- - The property owner themselves
- - An attorney acting under a valid Enduring Power of Attorney
- - An appropriately appointed Decision-Making Representative
- - Another person who has valid legal authority to act for the owner
- Families should establish that the appropriate authority is in place before entering into a tenancy.
Where there is uncertainty, independent legal advice should be obtained.Preparing a Family Home for Rental
Properties occupied by the same owner for many years may require some preparation before entering the rental market.
We can advise on what is actually required and what improvements may achieve a better rental return.
This may include reviewing:
- - BER requirements
- - Smoke and carbon monoxide alarms
- - Heating systems
- - Electrical condition
- - Furniture
- - Appliances
- - Decoration
- - Locks and security
- - Minimum rental standards
- - Insurance
- - Inventory and condition reports
Our objective is to prepare the property for the rental market without families carrying out unnecessary expenditure-
What Rent Could the Property Achieve?
Rental values vary substantially depending upon:
- - Location
- - Property type
- - Number of bedrooms
- - Condition
- - Furnishings
- - Transport connections
- - Local amenities
- - BER
- - Current local rental supply
- Positive Property can provide a rental valuation before you decide whether to rent the property.
We can also advise on expected demand, suitable tenant profiles and any improvements that may improve the property's rental potential.Fair Deal Scheme Property Letting in Dublin
Positive Property provides residential letting and property management services across Dublin and North Dublin, including areas such as:
Santry, Swords, Malahide, Beaumont, Artane, Raheny, Clontarf, Dublin 5, Dublin 9, Dublin 13, Dublin 17 and surrounding areas.
If a parent or family member has entered a nursing home and you are considering what to do with their house or apartment, we can assess the property and explain the practical steps involved in bringing it to the rental market.Frequently Asked Questions
Can I rent my house if I go into a nursing home under Fair Deal?
Yes. A person receiving support through the Fair Deal Scheme can rent their principal residence. Subject to the relevant conditions and application to the HSE, the rental income from the principal residence can be excluded from the Fair Deal financial assessment.
Does Fair Deal take 80% of rental income?
Rental income from properties other than the person's principal residence can generally be treated as income in the Fair Deal financial assessment.
However, qualifying rental income from the person's principal private residence can be assessed at 0%, meaning it can be fully disregarded for Fair Deal financial-assessment purposes.Does renting the house affect the Fair Deal three-year cap?
The rental-income rules and the three-year property cap are separate parts of the Fair Deal assessment. The person's qualifying principal residence remains subject to the relevant Fair Deal asset rules and three-year cap.
Is rental income tax-free under Fair Deal?
No. The Fair Deal exemption means qualifying rental income is excluded from the Fair Deal financial assessment. It does not automatically make the income exempt from Irish taxation.
Rental income should still be dealt with appropriately for Revenue purposes.
Do I have to register the tenancy with the RTB?
Most residential tenancies must be registered with the Residential Tenancies Board (RTB). The HSE normally requests confirmation of RTB registration when applying for the principal-residence rental-income exemption.
Certain tenancy arrangements can be exempt from RTB registration, so individual circumstances should be checked.Can my son or daughter manage the property?
Potentially, but the person dealing with the property must have appropriate authority to act on behalf of the owner.
Where the property owner has reduced decision-making capacity, families should obtain legal advice regarding the appropriate authority before entering into a tenancy.
Can Positive Property manage everything?
Yes. We can provide a complete letting and property management service, from initially assessing the property and advising on preparation through to finding a tenant, registering the tenancy, collecting rent and managing the property throughout the tenancy.
Thinking About Renting a Property While a Family Member Is in Nursing Home Care?
If you are dealing with a family home following a parent or relative entering long-term nursing home care, we can help you assess whether renting the property is a practical option.
Positive Property Ltd can provide an initial rental assessment and explain the steps required to prepare, advertise, let and manage the property..How Much Rental Income Can Your Property Generate?
Your ptroperrt could be a valuable source of rental income. Positive Property helps landlords unlock the full potential of their property by positioning it correctly, attracting suitable tenants, and creating a smooth letting process. With expert advice on pricing, presentation, and tenant demand, we help you achieve the best possible return while reducing empty periods.