Rent a room tax relief scheme (2024)

What is rent-a-room tax relief?

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 basem*nt flat or a converted garage.

You claim the rent-a-room tax relief when you make your annual tax return, see 'How to apply' below.

If you rent out a room in your home, you have certain rights and responsibilities. Our page on 'Renting out a room in your home' has more information about this.

Do I qualify for the rent-a-room relief scheme?

To qualify for rent-a room tax relief:

• 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.

Do I have to own the property to qualify?

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.

Since 1 December 2023, local authority tenants are able to rent out a room to a third level student and earn up to €14,000 in rental income per year tax-free. There are certain rules you need to follow, including that you apply to your local authority first.

What is not covered by the rent-a-room relief scheme?

You will not qualify for the relief if:

• 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.

For example, renting a room to a student for the academic year or for a one-month course is covered, but providing accommodation to occasional visitors for short periods, such as through an online accommodation booking site, is not, as this income is not considered to be rental income. This is because the visitors use the accommodation as guests.

If you normally rent out the room for the academic year and you rent it out for short breaks during the summer as well, you must identify the income you get from the short rentals separately from the income that qualifies for rent-a-room relief, when making your tax return to Revenue.

You can read more about rent-a-room relief on revenue.ie.

Renting a room and your expenses and taxes

Your expenses

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

In some circ*mstances, choosing not to claim the rent-a-room relief for a specific year could be beneficial. In that year, you could instead deduct expenses from the rental income and use wear and tear allowances. See revenue.ie for examples of when this can be beneficial.

How to opt-out of rent-a-room relief

If you want to opt out of the rent-a-room relief in a particular tax year and be taxed on the rental income instead, you must notify Revenue. You can notify them:

• Using MyEnquiries in MyAccount
• By writing to your local tax office

You must contact Revenue on or before the return filing date for that tax year. Read more on revenue.ie.

Your PRSI, USC and income tax

The income you get from renting out the room must be included on your annual income tax return. Rental income up to a maximum of €14,000 is exempt from:

• PRSI
• Universal Social Charge
• Income tax

Capital Gains Tax

Rent-a-room relief will not affect your exemption from Capital Gains Tax (CGT) if you sell your home.

Accommodation Recognition Payment

The Accommodation Recognition Payment (ARP) is a tax-free payment of €800 per month for hosting refugees from Ukraine. Payments made under the ARP Scheme are exempt from income tax, USC and PRSI. You can qualify for both the ARP and the rent-a-room relief scheme if you meet the criteria for both schemes.

Rental income and your social welfare payments and medical card

Your social welfare payments

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. The rules for some of these payments are relaxed if you are renting a room to someone, for example, you will still qualify for:

• Fuel Allowance, even if the person renting the room from you does not get a qualifying social welfare payment or does not qualify for Fuel Allowance in their own right
• Living Alone Increase, even though you are living with someone

You should check if renting a room in your home will affect any other payments.

Situations where my social welfare payment will be affected

In certain situations rental income of less than €14,000 a year for renting a room will be considered and can affect your social welfare payment. This applies if you rent a room in your home:

• As a short-term let. Short-term lets are stays that do not exceed 28 days in a row
• To an employee
• To an immediate family member

Immediate family members in this situation include:

• Your spouse, civil partner or partner
• Your child, or the spouse of your child
• Your parent, step-parent or parent-in-law
• Your sibling, including step-siblings or siblings-in-law
• Your grandparent or your grandchild
• Your aunt or uncle
• Your nephew or niece

The ARP for hosting refugees from Ukraine is not taken into account in the means test for any grants or payments from the Department of Social Protection or other public bodies. Payments under the ARP are not included in the €269.23 weekly limit for social welfare payments.

Your medical or GP visit card

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.

How to apply

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.

You will get the relief when you have made your tax return.

There is a four-year time limit to claim the relief. For example, claims for 2020 must be made by 31 December 2024.

Note: If more than one person is entitled to the rent, the €14,000 rental limit and the relief is divided between you. For example, if you and your spouse both own the home you are renting out a room in.

Further information

If you need help, contact Revenue. The tax office can answer any queries you have and will help if you have problems completing the form. You can also send queries to Revenue through myEnquiries.