I had a colleague who once asked us: can I
rent my house to myself or not and I remember I laughed and said of course no. But actually it can be done. Our manager sat with us and explained to us that if you buy a house with an LLC then you can rent it to yourself. Let me explain it a bit or it might seem confusing.
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How can you rent a house to yourself?If you go for LLC while buying a house you can rent it to yourself. An LLC or Limited Liability Company is nothing but a legal formation that is used for liability and tax reasons and the laws that govern these LLCs let it have a house listed under it. So just mortgage for the home in your name and then transfer it to the LLC. You will be personally liable for the mortgage and then rent it to yourself.
However there are two very important things that are to be kept in mind.
First, check with an accountant to make sure that everything is arranged properly. This is mainly done to avoid tax problems to both a lawyer and accountant’s advice is a must
Secondly make sure that the rent you are paying goes along with the fair market rent
This is what I found out when my friend posed the question: can I rent my house to myself but to be sure about it it is better to seek lawyer’s advice and then proceed.
Read More:How to get due room rent?
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Renting a house to yourself is possible via LLC or Limited Liability Company. It is a company that holds the ownership of your property, making it the landlord and that is how you can become a tenant and rent your house to yourself. You will just need to draft a rental agreement between yourself as the tenant and the LLC as the landlord that will allow you to pay rent to the LLC and potentially claim HRA or business expense deductions. Let me share more insights about can I rent my own house to myself next.
Can I Rent My Home to Myself?
Yes, you can rent your home to yourself via the Limited Liability Company (LLC). In such a case, LLC will become the landlord and you will become the tenant. Here is how you can do it:
Register an LLC with yourself as the owner, then transfer your house’s ownership to the LLC.
Draft a rental agreement where you will be mentioned as the tenant and the LLC as the landlord. But make sure that this agreement has everything mentioned clearly, like the rent amount, payment terms, and other conditions.
Do know that since you are the tenant here, you will need to pay the rent amount to the LLC. The best part is that you can claim HRA as well in such cases.
So this is how renting a property to yourself can be done.
Get the Rental Terms Clearly Drafted in the Rent Agreement via NoBroker and Delivered at Your DoorstepRead More:
What is the Difference Between Tenant and Owner?
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Authors Of The Question
Can I Rent My House to Myself?
Harshal
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2 Answers
2 Year
2022-11-17T11:17:24+00:00 2022-11-17T11:17:26+00:00Comment
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