personal finance

Don't get caught out by the new ‘Right to Rent’ rules

If you rent a room in your home to a lodger, you must now check their ID to make sure they have the right to be in the UK – even if they are a relative. These rules began in England on February 1 and will spread to the rest of the UK.

If you fail to make the checks and keep evidence of them, you could be fined up to £3,000. Penalties are even higher for landlords letting to tenants.

The rules come in just as the Chancellor allows you to keep more tax-free from renting out a room. From April, the tax-free rent-a-room allowance rises to £7,500 a year, from the old limit of £4,250.

Read more about the changes to stamp duty and tax for landlords.

What are the new rules?

The new Right to Rent rules apply to anyone who lets a room or other premises for someone to live in as their home. It has been introduced by the Home Office to make it harder for people here illegally to find somewhere to live.

To check that someone has the right to be here you must see a document such as a valid passport for the UK, an EU country, or for Liechtenstein, Norway, Iceland or Switzerland. Anyone else must show they have a right to be here. The Government has produced a list of documents that, separately or in combination, are adequate. 

You must see the original, not a copy, then make a copy for your own records, which you should date and keep safe.

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Who do the rules apply to?

You must make the checks even if you know the person or they are a relative. You must do the checks within 28 days of letting a room. The rules apply to adult children and other relatives if they pay rent.

The rules do not apply to lodgers or tenants who are under 18 or for temporary stays of up to three months. They do not apply to houseguests who pay no rent, or to holiday lets. They apply to new tenancies, so there is no need to check unless the tenancy began from February or later, although the rules differ if you reside in parts of the Midlands.

Click here for more information on the ‘Right to Rent’ rules. 

For more tips and useful information, browse our money articles.

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