Property let to family at a low rent

As a general rule the same tax implications arise when you let property to family, as when you let property to unconnected third parties. However there is one key exception. If you created an income tax loss by letting the property to family at a low rent the Revenue would be likely to apply special anti avoidance rules to prevent a loss arising. The Revenue view is that unless the you charge a full market rent for a property (and impose normal market lease conditions) it is unlikely that the expenses of the property are incurred wholly and exclusively for business purposes. Therefore strictly, they can't be deducted in arriving at rental business profits. However, if you would be letting the property below the market rate you can deduct the expenses of that property up to the rent you get from it. This means that the uncommercially let property produces neither a profit nor a loss.