Find out more about letting a room in your home.
The Rent a Room scheme is designed for people with a spare room or even two or more spare rooms. It’s a UK government promoted scheme that has been in place since 2019 and lets you earn £7,500 per year tax-free from letting out furnished accommodation in your home. This is halved if you share the rental income with your partner or someone else.
Rental income up to £7,500 does not require a tax declaration. Any extra charges towards things like utilities, meals and cleaning count towards the £7,500 tax-free allowance. If you earn more, you must complete a tax return.
You can earn more than £7,500 per year from this scheme. Income above £7,500 will be subject to tax and you should obtain tax advice.
You can opt out of the £7,500 per year tax free allowance and opt in to pay tax on your rental income minus any expenses and capital allowances. You should obtain tax advice if you prefer this option.
The Rent a Room scheme is not for you if your accommodation is:
The information in this guide was correct at the time of writing (August 2025). Tax rules can change, so please check the government advice for the latest rules and obtain specific financial and tax advice according to your circumstances. To find out more, visit the government's Rent a Room Scheme web page.
If you have taken more than one lodger at a time, you may have to pay Capital Gains Tax when you sell your home. However, you may be entitled to Private Residence Relief and Letting Relief.
HMRC have confirmed that one family consisting of one or more persons occupying one or more rooms in your home under a single Excluded License Agreement is classed as one lodger for the purpose of capital gains tax calculation. To find out more visit the government's web page about Capital Gains Tax when you sell your home and use the private lettings calculator. If in doubt, you should seek independent tax advice.
This is separate to regulations for Houses in Multiple Occupation (HMO). If you rent to a family of 3 or more, each one would be classed as a single individual. This means your property would be categorised as an HMO and must meet HMO management regulations. For more information please email Housing.Private.Sec@torbay.gov.uk
There is a challenging private accommodation market in Torbay. Individual houses are hard to find, and the cost is often greater than the Housing Benefits tenants may receive.
The Rent a Room scheme encourages homeowners and tenants to rent out spare accommodation, with a tax-free allowance. The room/s can be paid for through Housing Benefit, or Housing Allowance (if claiming Universal Credit), if the lodger is eligible.
The scheme is low on administration. It offers an alternative way for Homes for Ukraine hosts to continue providing accommodation to their guests.
If your offer is for your current guest/s, our comparison table (below) should help you and your guest understand the differences between the schemes.
If you are not hosting anyone, you can advertise your room(s) on the following websites:
The Refugee Support Team can check if there is a Ukrainian guest known to us who is currently looking for a room to rent – please email RefugeeSupport@torbay.gov.uk
We are not able to advertise more widely, or store adverts over time.
If this sounds like something you would like to consider, you can get started by following these simple steps:
Not applicable under this scheme.
An agreed deposit up to five weeks rent. There is no requirement to hold this in a government approved deposit scheme for live-in landlords. We may be able to support a lodger to pay this deposit if they cannot afford it. The deposit is returnable at the end of the tenancy, minus any deductions as per the contract.
Not applicable under this scheme.
It is up to the landlord whether to ask for a guarantor. Many Ukrainian lodgers may find it challenging to provide one. We are not able to act as a guarantor.
We administer the payments to hosts in Torbay. The thank you payments are covered by the government.
Not specified – in line with the market rates in the area. Landlords can earn up to £7,500 per year tax free.
We administer the payments to hosts in Torbay. £350 per month for the duration of the guests’ original Homes for Ukraine visa plus the 18-month visa extension.
The lodger pays the rent. Those on low income may be eligible to claim Housing Allowance (if receiving Universal Credit), or Housing Benefit. They can use the online benefit calculator or check with DWP for their personal circumstances
Hosts may ask guests to pay a reasonable and proportionate contribution for water, gas and electricity. They must not be charged for more than they use. This contribution is tax-free.
Utilities are often included in the rent. If utilities are charged for separately, the contribution counts towards the £7,500 tax free allowance. Any amount charged for utilities must not exceed the lodger’s actual use.
Homes for Ukraine visa holders are currently disregarded in the council tax calculations. Sharing your home with Homes for Ukraine guests does not currently affect your single occupancy discount or council tax exemption. For the latest information, please visit the government's Council Tax page.
Homes for Ukraine visa holders are currently disregarded in the council tax calculations. Sharing your home with Homes for Ukraine visa holders does not currently affect your single occupancy discount or council tax exemption. The exemptions are only for those on Homes for Ukraine visas. Those who are on Ukraine Permission Extension visas are not covered under the exemption.
For the latest information, please visit the government's Council Tax page. If you receive Council Tax support and Universal Credit, the first £7,500 per year of your rental income will not affect your Council Tax Support.
If you receive Council Tax support, but not Universal Credit, your Council Tax Support may be affected – please check our website for further information and support on bill reductions, exemptions and discounts. You must tell them if your lodger is a family member.
Homes for Ukraine visa holders are currently disregarded in the council tax calculations. Sharing your home with Homes for Ukraine guests does not currently affect your single occupancy discount or council tax exemption. For the latest information, please visit the government's Council Tax information letter on the Ukraine Permission Extension scheme.
Homes for Ukraine visa holders are currently disregarded in the council tax calculations. Sharing your home with Homes for Ukraine visa holders does not currently affect your single occupancy discount or council tax exemption. For the latest information, please visit the government's Council Tax information letter on the Ukraine Permission Extension scheme. If you receive Council Tax support and Universal Credit, the first £7,500 per year of your rental income will not affect your Council Tax Support.
If you receive Council Tax support, but not Universal Credit, your Council Tax Support may be affected – please check our website for further information and support. You must tell them if your lodger is a family member.
If you receive benefits, hosting under the Homes for Ukraine scheme should not affect them. You will need to check with DWP or Torbay Council (whichever pays your benefits) for your personal circumstances.
Homes for Ukraine guests cannot claim Housing Allowance or Housing Benefit as they do not pay rent.
If you are a landlord receiving Universal Credit, the first £7,500 per year of your rental income will not affect your benefits. You will need to check with DWP for your personal circumstances. You will need to let DWP know when you take in a lodger.
If you do not receive Universal Credit but claim Housing Benefit from Torbay Council because you rent your home, your Housing Benefit may be affected – please check with the Torbay Council Benefit team. You must tell them if your lodger is a family member.
If you rent from the council or a housing association and are subject to the “bedroom tax”, this may be removed when your spare room is let – please check with your landlord if you can sublet your spare room and how it will affect your rent.
Lodgers on low income may be eligible to claim Housing Allowance (if receiving Universal Credit), or Housing Benefit. They can use the online benefit calculator to check or check with DWP for their personal circumstances.
Insurers have agreed that you do not need to contact them in the first 12 months if you accommodate people from Ukraine. This is because they are non-paying guests. Your cover will remain the same. If any refugees are still living with you after 12 months, you should tell your insurer when you renew your policy. Please refer to the Association of British Insurers’ statement for more details. In other situations, including where you offer separate accommodation, or if you don’t own your home, you will need to contact your insurer as soon as possible.
You will need to let your insurance provider know if you have lodgers. This may result in amended cover and a (slightly) higher premium.
Lenders have committed to enable as many borrowers as possible to participate in the scheme. If you have a mortgage, visit your lender’s website for information.
You should check with your mortgage provider whether they allow lodgers - most do.
Guest – no legal status (similar to excluded occupier).
Lodgers are considered excluded occupiers, if they share any living space with you or your family, such as a bathroom, kitchen, or living room. Find out more about tenancy types.
No set contract. Hosts are typically asked to provide accommodation for 6 months minimum. Thank you payments are made on a monthly basis in arrears. Thank you payments are available to sponsors for the duration of the guests’ original Homes for Ukraine visa plus the 18 months visa extension.
As agreed between the landlord and the lodger/s. It can be periodic (for example weekly or monthly), open ended, or for a specific duration chosen by the landlord.
As per the MHCLG guidance there is no set contract unless agreed separately by the host/s and their guest(s).
Although legally a contract is not required, it is highly recommended that a written contract is agreed and signed by the live-in landlord and their lodger(s). The contract should outline the terms and conditions.
Homes for Ukraine guests do not pay rent and therefore do not come under HMO legislation.
Providing it is big enough, a household can have up to 2 lodgers without being classed as a HMO. Any more and HMO management legislation will apply. You should email the Torbay Housing Standards team for advice and information.
If you would like this information in another format or language, please contact us.
If you have any suggestions for questions about this factsheet, feel free to email us at RefugeeSupport@torbay.gov.uk
Links are correct at the time of document publishing August 2025. External links are included to help you find information but are not checked and verified by Torbay Council.