Fair Deal Advice Blog

Rent of the Family Home is now exempt under the Fair Deal

The Government have finally passed the legislation to exempt Rental Income from assessments under the Fair Deal. This has come into effect from the 1^st of February 2024. It means that any resident who rents their home while under the fair deal will not have to contribute any of the rent towards their cost of care.

This change is a result of the Government striking a deal with the Independent TD ‘s for this exemption in return for their support in the vote to remove the eviction ban last year. The change like any changes to the Fair Deal that benefits the resident, while welcome comes with caution. At the time the Minister for older persons Mary Butler was quite vocal about the change, citing her concerns that the change could result in Elder Abuse, whereby older persons may be forced into Nursing Homes, before they need to, so that their family can benefit from the rent.

I co wrote an article in the Irish Independent which you can see on our blog which outlined why renting out the home under the Fair Deal even with rent being an exempt income was not necessarily a good idea. My concerns stand and in summary remain as follows.

• • Families or the homeowner will have to register with the RTB as a Landlord
• • The RTB may require substantial improvements to be carried out to the home to bring in line with their minimum requirements.
• • Who has the right to sign a rental agreement if the home owner has lost capacity and does not have an EPOA in place.
• • Tenants will be entitled to a minimum 12-month contract, with notice thereafter of 180 days which will increase the longer the tenancy runs for.
• • The homeowner when they own the home have Rights, when they rent, they have obligations.
• • Where residents have to avail of the Nursing Home loan, when they pass their Executors may not be able to get vacant possession of the home to sell it in time to repay the Nursing Home loan, which is repayable within 12 months of death. Thus, incurring punitive interest rates from Revenue who collect the loans on behalf of the HSE.
• • Investment in the property required by the RTB may not be recouped in rent if the Nursing Home resident passes within a certain time period.
• • The investment required to bring the house up to RTB standard may use up scarce savings that are required to pay for the care and other costs that the resident may incur.
• • Renting in Ireland is really for those who are willing to enter the rental market for the long-term with increasing legislation and tenant’s rights. Sadly, most Nursing Home residents only live on average for 2.5 years in care, thus will usually not benefit from the arrangement long enough to recoup costs of investment in the property to bring it to a renting standard.

• • Tenants right to buy.
• • For some it may work as it may allow rents to be saved to repay the Nursing Home loan etc
• • It will allow the house to be occupied when perhaps it cannot be sold due to lack of capacity to sign sales documentation by the owner.
• • But when I weigh up the pros versus the cons up, I still do not believe it is a good thing to do.

When my article appeared on the front page of the Independent last May I received significant positive feedback to the article and on Radio Shows in which I was a guest after it. Many of my new clients in the months that followed brought the article up and stated how right I was in everything I had said based on in some cases what many of them had experienced as accidental landlords. Why would anyone take on the additional stress of being a landlord when one has a loved one in care and all the other stresses of life.?

I recommend for further information that you read our blog at www.fairdealadvice.ie or contact Tom Murray @ 086 601 5042 or email advice@fairdealadvice.ie

Please like and share.

Tom Murray
Managing Director
Fairdealadvice.ie

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