However, if your daughter covers all the property's ongoing running costs, her use is tax-free under the so-called ‘associate rule’.

To be exempt, your daughter must cover all operating costs such as:

• shared costs of the jointly owned property/housing association
• maintenance costs
• electricity etc.

No income or costs associated with the dwelling should be entered in the tax return, neither by you nor by your daughter.

Please note that if the daughter pays more than what the operating expenses would amount to, such as instalments and interest on the parents’ mortgage, the associate rule does not apply.

Sub-letting

As long as your daughter’s (or other associate's) use is tax-free under the associate rule, she can also let out up to half of the apartment (calculated according to rental value) tax-free, as if she actually owned it. Your daughter could therefore let a room in the apartment to a friend without having to declare the income in her tax return – but only if it's your daughter who actually receives the rental income and less than half of the apartment (calculated according to rental value) is let out.

However, remember that the rental value calculation can vary depending on the type of letting concerned, e.g. short-term letting versus letting on a more permanent basis.

Note that, from the income year 2018, the tax exemption requires that the letting period lasts at least 30 consecutive days. Concerning taxation of letting for shorter periods, see the rules for short-term letting.