New Government plans will allow homeowners to build modular homes in their back gardens without planning permission and rent them out for up to €14,000 a year tax-free.
Cabinet approved the exemption on Tuesday, with units between 32 and 45 square metres no longer requiring planning approval when placed behind an existing home.
Here’s everything you need to know about the rules, the costs, and how much you could earn.
Pic: Frederic J. BROWN / AFP via Getty Images
The rules
The homeowner must be living in the main dwelling. The garden must have at least 25 square metres of usable space remaining after the unit is built and separate entrances are required.
Units must be a minimum distance from the main house and also be at least 0.6m from boundary walls.
All building, fire safety and building control regulations still apply as, despite reports, the homes are not seen as ‘sheds’, they’re habitable dwellings.
How much could you earn?
The Rent-a-Room scheme is being expanded to cover modular garden units, meaning owners can receive up to €14,000 a year in rental income completely tax-free. Charge above that and you pay tax on the full amount.
That works out at roughly €1,150 a month.
What does it cost to build one?
Quality one-bed modular units typically cost between €105,000 and €135,000 though cheaper options exist.
One Dublin homeowner who spent €75,000 on a unit saw their overall property value increase by €125,000, according to a report in the Irish Examiner.
When does it kick in?
Not just yet. The regulations still need to pass an environmental assessment and be approved by the Oireachtas before they become law.
However, the Government expects this to happen in the coming weeks.
One big catch
Renters in these garden units will be classed as licensees, not tenants.
This means they’ll have no protections under the Residential Tenancies Board, no security of tenure, and can be asked to leave at short notice.
Housing charity Threshold has called for this to be addressed before the rules take effect.
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