To ask how much rent I ought to be paying?

[TooSweetToBeSour]

I have moved in to a close family members flat for the foreseeable future. They only live here part time (approx half the month), spending the rest of their time in their main home in another country. They are fairly well off, own two other homes besides this one. Our relationship is good and the arrangement is working well so far.

They’ve asked me to suggest an amount for rent and I’m not sure what to offer. The usual rental value of the flat (small 2 bed) in its entirety, unfurnished, is about £900pcm - £1,000pcm.
I have furnished this flat with my own stuff as relative had nothing (they only recently purchased it), including their bedroom. Obviously I enjoy full time use of the flat while they are only here half the time, however when they are here the space is compromised (it’s a small flat) and also whatever I pay them will be cash in hand so no tax, no usual landlord related costs. Bills we already have an agreement for (they pay all the council tax, I pay 2/3 of utilities).

What would you suggest if you were me?

I would bat the decision back to them and ask them for a ball park amount and work from there. Just ask them for a window ie between 300 to 600 and maybe just meet somewhere in the middle. TBH, them paying the council tax bill is quite a big chunk.

I think you should pay £450 + half of council tax and 2/3 of utilities since you use them most.

I agree about £500 plus bills.

Their tax arrangements shouldn’t really impact on what you offer but not paying tax on rental income is I guess how some people get rich enough to buy multiple properties. If you take the market value as £1k, I’d probably think 50/50 ok. Make sure though that there are smoke alarms, CO alarms, boiler checks (all the things legit landlords should be doing).

Thanks for the input. I think it’s the cash in hand bit that’s making me overthink. 50% does seem the obvious choice but given their earnings this incremental income would be taxed if I was an ‘official’ lodger, so they’ll benefit financially from ‘renting’ to me, IYSWIM. There’s also the cost and wear & tear of my furnishings, which they also benefit from.

Obviously I want to be fair, but in both directions! Maybe I am just overthinking.

What is the typical rate for a room? I'd probably suggest the rate as if you were a lodger. I'm assuming otherwise the place would be empty and they would get no income.

As you have the status of a lodger, I would say whatever the local housing allowance for shared accommodation is.

You can find that out from the council's website.

This whole situation. Wow.

I think £400-500 is pretty fair in this situation. And they should be paying tax on it but that's nothing to do with you and I'm not sure you should benefit from them not doing so. It's quite a bonus to have the flat to yourself for so much of the time. It's very rare in flat shares and is worth a lot.

£500 seems fair. You have no control over when they use it, but they have the right to whenever they want.

The tax is not your issue, and shouldn't be a factor. If they get caught (or you fall out and report them), they will have to pay it. It's their risk, and you shouldn't get the benefit.

You’re more a lodger than tenant by the sounds of it although a lodger who has furnished the whole flat!

£500 plus half of bills sounds fair.

Thanks all, you’ve helped clear the fog!
I know it’s an odd situation but it’s working for us!

How much is a room in a shared flat in your area as that is what you have, regardless of comings and goings of other occupants.

I know it’s an odd situation but it’s working for us!

Quite. That's the thing about refusing to pay taxes, it works for the people who don't bother.

Assuming you're in the UK you can rent out a room to a lodger and get £7500 a year tax free. So they'd never need to be paying tax on income from what you'd pay them anyway