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Rules for renting out your driveway

  • Rules for renting out your driveway

If you’re looking to make a little more money in 2023, and you find yourself with a driveway that you don’t use either all or part of the time, renting it out might be a great way to make some extra cash. Some people across the UK earn around £3,000 from their driveway alone!

Why would you rent your driveway out? 

If someone rolled onto your driveway uninvited, you’d be pretty annoyed. However, if you live in a town or city, near a train station, or anywhere decent-sized spaces are hard to come by, a visitor to your driveway may just be welcome. 

As with all money-making endeavours, there are some rules and guidelines around making a profit from your parking space; in this article, we explore what you need to be mindful of when you offer your driveway up for rent.

You can only rent out off-road parking spaces 

However much claim you feel you have over an on-road parking space, it’s only private driveways that you’re able to make money from - no sectioning off parts of a public road outside your house! 

Be safety-conscious

The person you rent your driveway out to is basically a tenant, so they’re free to come and go as they please. Ensure you meet the renter prior to the agreement being cemented if you’re in any way concerned about the safety element of letting a stranger use your drive. 

Draw up a contract 

To protect yourself, a contract should be in place to set out some basic ground rules and expectations. For example, you don’t want to be responsible for anything that may happen to the car whilst it’s on your property, so have this in a contract.

Square things with your home insurer 

Whilst most home insurers agree that renting out your driveway shouldn’t really affect your cover, it could be seen as a business interest, which is where things could get a little muddy. It’s worth giving your home insurers a call to explain the situation and make sure you’re doing things by the book in terms of liability if something were to happen to the car or owner of it during their ‘tenancy’. 

Income tax applies

If the money you earn from your driveway exceeds £1000 annually, you’re likely to be liable for tax. If you already fill out a tax return every year, the rental income you earn needs to go on the land and property page. If you don’t, phone or send a letter to HMRC to let them know that you now earn money from your driveway, and they’ll be able to guide you on the next steps for declaring it. 

Double-check with your mortgage lender or landlord

If you currently pay a mortgage, there’s a chance you need permission from your lender to rent out your driveway, so a phone call to them is your first port of call. In the same way, your landlord will need to be notified if you rent, as it’s likely you’ll need permission in this instance too.