Are you looking for a simple yet effective way to earn some extra cash? If you own a parking space or driveway, whether it’s at your home, office, or any other property, you might be sitting on a goldmine without even realising it. Renting out your parking spot can be a lucrative venture, offering a steady stream of income with minimal effort. However, before you rush off to advertise it, it’s essential to understand the legalities and limitations surrounding this practice.
Check Rules and Regulations
First and foremost, it’s imperative to check the rules and regulations in your area regarding parking space rental. Ignoring these regulations can land you in hot water and lead to hefty fines or legal trouble. Therefore, always ensure that you’re operating within the bounds of the law.
Typically, shared ownership arrangements necessitate that you own the property outright before you can rent out any associated parking spaces.
Attempting to rent out a parking spot without proper ownership could breach the terms of your leasehold agreement and result in repercussions from the property management or homeowners’ association. This applies to rented homes too.
Once you’ve addressed the legalities and ownership requirements, renting out your parking space can be a relatively straightforward process. There are several platforms and apps available that connect parking space owners with individuals in need of parking. These platforms handle the advertising, booking, and payment, making the process seamless for both parties involved.
How Much Can You Make Renting Out a Parking Space?
Depending on your location, you could earn up to £200 per month (and potentially more in certain areas, such as parts of London) by allowing someone to park in your driveway or parking space.
The most sought-after spaces are often found in city centres, but there’s still potential for significant income elsewhere. If you live near major transportation hubs like airports, railway stations, or even sports stadiums, it’s worth assessing the value.
See how much you could earn here!
Do I Have to Pay Tax If I Rent Out My Parking Space?
When you rent out your driveway or parking space, the income you receive falls under the category of income from land and property, rather than self-employment income. The good news is that any cash earned from renting out your space up to £1,000 is exempt from income tax.
The UK government introduced the property trading income allowance in April 2017. Under this allowance, you can make up to £1,000 per year tax-free from rental income related to your property, including parking spaces.
If your parking space income remains below this limit, you won’t have to inform HMRC about it, and it will be exempt for tax purposes.
In conclusion, renting out your parking space can be a lucrative opportunity to generate passive income. However, please do your due diligence, ensuring that you comply with local regulations and ownership requirements.
Why let that valuable parking spot go to waste when you could be making money from it?
