Another note re: House Concerts in the US
Here in the San Francisco area, there are relatively frequent House Concerts. Some of these ARE commercial endeavors, in as much as there is a set fee for attendance.
I haven't been involved in RUNNING one, only attended a couple, but my (possibly flawed) understanding is that the homeowner is effectively "donating" use of her space, and all the collected proceeds go to the performer.
A local music club occasionally books some relatively notable talent when they are coming around on tour - this is made easier because the club guarantees a certain minimum take for the performers. If ticket sales exceed the minimum, then the performer gets more, but they know they'll get AT LEAST that minimum. The bad part of that is if only a few people show up for the concert, the club ends up making up the difference.
I'm afraid I can't give details on the legal/contractual details involved. Since the US (and California in particular) is a highly litigious culture, I'm sure there are some formalities that must be observed.
Perhaps a bit of research into the appropriate laws in your area could lead to finding a legal way for someone to host a for-pay concert in a private residence. Possibly contacting nearby organizations devoted to folk or traditional music could save a lot of time and hassles - they may have already done the research and could give you a rundown on what is necessary.