What is Rent a Room Relief?
Rent a Room Relief allows householders to rent a room or rooms in their property free of income tax, PRSI or USC up to a maximum of €14,000 per year. This amount includes any payments made to the householders for electricity etc.
Do I have to live at the property to be entitled to Rent a Room Relief?
Yes. It must be your main residence during the tax year. You do not have to own the house or apartment to claim relief unless you are renting to someone in receipt of Housing Assistance Payment, in which case you must be able to prove that you own of the house or apartment.
Will renting a room affect my pension or other social welfare payment?
If you are getting a means-tested payment like a pension or Social Welfare, any rental income you get will be assessed as income and may affect your payment. However, rental income will not be assessed as means if you are getting a State Pension (Non-Contributory) or a Widow’s/Widower’s or Surviving Civil Partner’s (Non contributory) Pension and you would be living alone unless you rented out a room in your home.
If you live in an area with good transport links to Universities and other Higher Education Institutes, how do you connect with students looking for accommodation?
Householders can contact their local Higher Education institution accommodation office who will can help you. The Department of Education and the Department of Housing are providing funds to the Union of Students in Ireland for matching up homeowners and students all across the country. You can get more information by calling 01- 7099300, and dial 4 to speak to someone about renting a room in your home
Do I have to provide meals?
No, Rent a Room is not a traditional “digs” situation, it is more like a houseshare.
I have a granny flat/other self-contained unit, does this qualify?
The rented room or rooms must be connected to the house or apartment for example a converted garage or extension. A free standing unit not attached to the property is not eligible for Rent a Room relief.
Is the relief only available if I rent to students?
No. Rent a Room Relief applies to students and workers and plays an important role in housing students across the country. However, it is not only for students, you can rent a room under this scheme to anyone except:
your child or civil partner;
an employee or
short term guests, including those who book accommodation through online booking sites.
Do I have to complete any paperwork for Revenue?
Income qualifying for Rent a Room Relief must be put on a Form 12 tax return which can be completed online if you are taxed through the PAYE system or Form 11 if you are self-assessed. As long as the income from the rental is below €14,000, no tax will be due. No expenses can be deducted so all the income has to be counted.
Do I need to provide a lease?
No, any rooms let under Rent a Room are licence situations, not tenancies. You don’t have to have a lease but it is advisable to discuss some basic rules and to put those in writing, signed by both parties dealing with the important issues, like
how and when will the rent be paid?
Are overnight guests permitted? How will bills be divided?