Dáil Éireann Debate, Tuesday - 25 March 2025
284. Deputy Carol Nolan asked the Minister for Finance if his Department has conducted any studies on the effect of the €14,000 rent a room tax relief; his views on whether it may be pushing up the rental cost of such rooms, given the preponderance of such rooms for let in the €1,100-1,200 bracket; if landlords are setting the price at this level to fully avail of the tax break; and if he will make a statement on the matter. [13690/25]
Amharc ar fhreagraRent-a-room relief, which is provided for in section 216A Taxes Consolidation Act 1997 (TCA), was introduced in 2001 with the aim of increasing the availability of rented residential accommodation. The section provides that, where an individual rents a room or rooms in her/his home as residential accommodation, and the gross rent received (including sums for food, laundry or similar goods and services) does not exceed €14,000 in the tax year, s/he is treated for income tax purposes as having neither profits nor losses from the payment for that accommodation.
I am advised by Revenue that the claims for rent-a-room relief in 2022, broken down in increments of €1,000, are as follows.
|
Range of exempt income - rent a room |
Number of Taxpayer Units |
Share of Total Number of Taxpayer Units claiming the exemption |
|
<=€1000 |
518 |
4% |
|
€1001-€2000 |
674 |
5% |
|
€2001-€3000 |
926 |
7% |
|
€3001-€4000 |
809 |
6% |
|
€4001-€5000 |
1027 |
7% |
|
€5001-€6000 |
1314 |
9% |
|
€6001-€7000 |
884 |
6% |
|
€7001-€8000 |
1119 |
8% |
|
€8001-€9000 |
1010 |
7% |
|
€9001-€10000 |
911 |
6% |
|
€10001-€11000 |
823 |
6% |
|
€11001-€12000 |
1227 |
9% |
|
€12001-€13000 |
737 |
5% |
|
€13001-€14000 |
2205 |
16% |
|
All |
14184 |
100% |
The Deputy might note that, while the increment with the highest number of rent-a-room relief claims is the one between €13,001 and €14,000, this still has less than one-sixth of the overall number of claimants. In many of these cases, the landlord may be letting more than one room.
Furthermore, if the gross rent received from letting a room or rooms exceeds €14,000 in a tax year, rent-a-room relief is not available, and the gross rent received is taxable in full, subject to any deductions allowable under the TCA. This ceiling acts as a considerable disincentive to rent-a-room landlords charging cumulative rents exceeding €14,000 per annum.
The Rent-a-Room scheme was considered as part of the Tax Strategy Group process in 2023. At the following link:
www.gov.ie/pdf/?file=https://assets.gov.ie/263923/a28365ed-af44-4501-a0f0-f79a1024ba63.pdf#page=null
Further information on rent-a-room relief can be found in Tax and Duty Manual Part 07-01-32 at: www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-07/07-01-32.pdf
In addition, annual statistics on rent-a-room relief from 2004 to 2022 are available on the Revenue website at: www.revenue.ie/en/corporate/documents/statistics/tax-expenditures/costs-tax-expenditures.pdf
