Taxpayers often find it difficult to distinguish between declaring that they are staying in someone else's home and declaring the rent-free use of a property.
People frequently assume that they are being hosted simply because they do not own the property and do not pay anything, such as rent, to use it.
In fact, being hosted means sharing a home: the taxpayer lives in the same home as its owner or tenant. By contrast, granting rent-free use means that A allows B to live in a property without A living there.
When rent-free use is granted to a first-degree relative, no imputed rent is calculated. When it is granted to someone who is not a relative, or to a more distant relative, a minimum imputed rental value of 3% is calculated.