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Rent-a-Room Relief

  1. Overview
  2. What conditions must be met?
  3. What type of residence qualifies?
  4. How is Rent-A-Room Relief applied?
  5. How does it affect other reliefs and taxes?

What conditions must be met?

For you to qualify for Rent-a-Room Relief the following conditions must be met:

  • the gross income from the rent must be below the exemption limit
  • there must be a minimum continuous-letting period (with exceptions)
  • and
  • the room must be in a ‘qualifying residence’.

Exclusions

You cannot claim the relief against income received for the use of the room or rooms from:

  • your child or the child of your civil partner
  • your employer
  • or
  • short-term guests (including those who book accommodation through online booking sites).

Note

The relief can apply to lettings used as residential accommodation for students in an academic year or term.

Exemption limit

There is an annual exemption limit for Rent-a-Room Relief. This limit applies to the gross amount of income received for the room or rooms in your home. Since 2017, the annual exemption limit is €14,000.

The gross income is the total income before you deduct expenses.

Expenses include the maintenance of the room let and capital allowances due on fixtures and fittings.

If your gross rental income does not exceed the exemption limit, you do not pay:

If the gross rental income does exceed the exemption limit, the total amount of income is taxed.

Minimum continuous letting period

From 1 January 2019, the relief does not apply to income arising from letting periods which do not exceed 28 consecutive days.

Exceptions

Relief will apply to shorter term residential accommodation which is not for leisure or commercial purposes, for example:

  • lettings for respite care for incapacitated individuals
  • accommodation for full or part time students, including language students
  • and
  • four-day-a-week ‘digs’.
  • Example 1

    John rents a house that he occupies as his sole residence. He sub-lets a room during 2022. His tenant paid him gross rent of €13,000.

    While the room was sub-let, John spent €1,500 on repairs and maintenance of the room.

    John qualifies for Rent-a-Room Relief for 2022 as his gross income from letting the room did not exceed the 2022 limit (€14,000).

    The expenses of €1,500 are not taken into account. John cannot deduct any expenses that have been incurred in connection with obtaining the income if the relief is granted.

    On his Income Tax Return, John enters €13,000 as his income which is subject to Rent-a-Room Relief.

  • Example 2

    Mary purchased a new house in April 2022 for occupation as her sole residence.

    As her mortgage repayments were very high, she decided to let a room in the house. She received rent of €13,000 in 2022. She also received €1,500 for providing meals to her tenant. Mary’s gross income from letting the room and providing ancillary services was €14,500.

    As this amount exceeds the limit for 2022 (€14,000), she is not entitled to Rent-a-Room Relief for that year.

    She is taxable on the total income of €14,500, less any allowable expenses.

Next: What type of residence qualifies?

Published: 06 December 2024 Print this page

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