Rent A Room

What’s The Story With ‘Rent A Room’?

Rent-a-room relief lets you earn up to €14,000 per year tax-free if you rent out a room in your home to private tenants. You can also get the relief if you rent out a self-contained unit, such as a basement flat or a converted garage. You claim the rent-a-room tax relief when you make your annual tax return.

To qualify for rent-a room tax relief you must meet the following requirements:

• Your home must be located in Ireland.

• You must occupy your home as your sole residence. This means that it is your home for the greater part of the year and it is where people would normally expect to contact you.

• Your total rental income cannot be more than €14,000 per tax year (1 January to 31 December). This includes any money that your tenant pays for food, utilities, laundry or similar goods and services.

• The people you rent to must use the room on a long-term basis. This means stays of more than 28 days in a row.

You do not have to own the property to qualify for rent-a-room relief. You could be a tenant and be sub-letting to someone else. In this case, you should check with your landlord that sub-letting is allowed.

You will not qualify for the relief u der the following conditions:

• Your gross income from rent and related services is over €14,000. In this case, Revenue will treat the full rental income minus allowable expenses as part of your total income for tax purposes and this should be included in your tax return.

• You are renting the room in your home to your spouse, civil partner or partner, son or daughter. There is no restriction for other family members.

• You are an employee or office-holder in a company, and the company pays you to allow clients to use the room in your home on an occasional basis.

• You are renting the room to short-term guests for a period that does not exceed 28 consecutive days, for example, through an online accommodation booking site.

• Short-term lets - The relief does not apply to short-term lets. Short-term lets are lettings that do not exceed 28 consecutive days. The occupants must be using the room on a long-term basis.

You cannot deduct expenses from your rental income when claiming rent-a-room relief.

Rental income up to a maximum of €14,000 is exempt from:

• PRSI

• Universal Social Charge

• Income tax

• Capital Gains Tax

If you are getting a means-tested weekly social assistance payment, Supplementary Welfare Allowance or Working Family Payment, you can get up to €269.23 a week (€14,000 per year) for renting out a room in your own home without it affecting your social welfare payment.

This also applies if you are getting the Living Alone Increase, Household Benefits Package or Fuel Allowance.

If you rent a room in your home, up to €14,000 of your annual rental income will not be taken into account in the means test for your medical card or GP visit card.

To claim rent-a-room relief you must enter your exempt rental income on your annual tax return. You can complete and submit your tax return form online using:

• Revenue's myAccount Service if you are a PAYE taxpayer (Form 12)

• Revenue Online Service (ROS) if you are self-employed or a PAYE taxpayer with other sources of income (Form 11)

Alternatively, you can complete a hard-copy annual tax return and return the completed form to your local tax office.