Dáil Éireann Debate, Tuesday - 7 November 2023
302. Deputy Mairéad Farrell asked the Minister for Finance if parents who are currently renting themselves and also paying the rent for their children in student accommodation will receive the tax credit once for the accommodation in which they are based, or twice to include the student accommodation; and if he will make a statement on the matter. [47594/23]
Amharc ar fhreagra303. Deputy Mairéad Farrell asked the Minister for Finance if students who are currently paying for student accommodation but are not currently in employment and paying tax through that employment can avail of the renter's tax credit; and if so, how this will function; and if he will make a statement on the matter. [47595/23]
Amharc ar fhreagra304. Deputy Mairéad Farrell asked the Minister for Finance if the change in the renter's tax credit which allows for students living in digs accommodation to avail of the tax credit requires the landlord to be registered with the RTB; and if he will make a statement on the matter. [47596/23]
Amharc ar fhreagra307. Deputy Mairéad Farrell asked the Minister for Finance if it is the case that PhD research students are excluded from the new student renters' credit; if so, if he can outline the rationale for this; and if he will make a statement on the matter. [47666/23]
Amharc ar fhreagra308. Deputy Noel Grealish asked the Minister for Finance if the rent tax credit can be claimed by a single person who is renting a property for themselves and, at the same time, in respect of their child, for whom the parent is paying for rental accommodation while the child is a full-time student; and if he will make a statement on the matter. [47703/23]
Amharc ar fhreagra317. Deputy Éamon Ó Cuív asked the Minister for Finance whether, in circumstances where a parent is in rented accommodation and has a son/daughter in third level education also renting in a different property, he intends increasing the maximum tax credit for renting to double the proposed limit of €750; and if he will make a statement on the matter. [47842/23]
Amharc ar fhreagraI propose to take Questions Nos. 302 to 304, inclusive, 307, 308 and 317 together.
Section 473B of the Taxes Consolidation Act 1997 provides for the rent tax credit. This credit is available for the years of assessment 2022 to 2025.
Subject to a number of conditions, the rent tax credit is broadly available in the following three circumstances:
1. where the claimant makes a qualifying payment in respect of a residential property which he or she uses as his or her principal private residence,
2. where the claimant makes a qualifying payment in respect of a residential property which he or she uses to facilitate his or her attendance at or participation in his or her employment, office holding, trade, profession or an approved course, and
3. where the claimant makes a qualifying payment in respect of a residential property which his or her child uses to facilitate his or her child’s attendance at or participation in an approved course.
This credit is currently subject to an overall cap of €1,000 for a jointly assessed couple and €500 in all other cases. I have brought forward a measure in this year’s Finance Bill that will further increase the value of this credit. Thus, following enactment of the Bill, the value of the credit for the 2024 and 2025 tax years will increase to a maximum of €1,500 for a jointly assessed couple and €750 in all other cases.
If a claimant is paying rent in respect of their own principal private residence and also rent in respect of a property used by a child to attend third level education, the claimant is entitled to claim in respect of both properties. However, in such circumstances the maximum tax credit available will be limited to the value of one full tax credit for that year. This means that for the tax years 2022 and 2023, the maximum tax credit per year is €1,000 for a jointly assessed couple and €500 in all other cases. For the tax years 2024 and 2025, the maximum tax credit per year is €1,500 for a jointly assessed couple and €750 in all other cases.
In order to obtain benefit from the tax credit the claimant must have an income tax liability and thus the capacity to utilise the tax credit. Therefore, if an individual is paying rent but is not subject to income tax, the tax credit will not be of benefit to that individual.
I am making a further change in this year’s Finance Bill which will broaden the scope of the credit regarding payments made by parents in respect of “digs” or rent-a-room arrangements for their children to attend an approved course, which will now qualify for the rent tax credit. This is provided the claimant and their child are not related to the landlord and the other conditions of the section are met. This amendment will apply to the tax years 2022 to 2025 (inclusive). Furthermore, this change does not impose any additional Residential Tenancies Board (RTB) registration requirements, if a tenancy is not required to be registered with the RTB this will amendment not change the position.
In order for rent paid by a parent for a child’s use of a residential property to facilitate their attendance at or participation in a course to qualify for the rent tax credit it must be an approved course. An approved course for the rent tax credit has the same meaning for the purpose of this measure as is set out in section 473A of the Taxes Consolidation Act 1997, which provides for tax relief on third level tuition fees.
Broadly, an approved course means any of the following:
• a full-time or part-time undergraduate course of at least 2 years’ duration, or
• a postgraduate course of between 1 and 4 years’ duration which results in a degree or equivalent qualification being conferred on the participant based on a thesis, examination result, or a combination of both.
Revenue advise me that PhD courses do not, generally, fall within the definition of an approved course. However, a PhD student (or any other person) may still claim the credit in their own right if the claim meets the other requirements of the credit.
Further details in relation to the rent tax credit can be found on Revenue’s website at www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-15/15-01-11A.pdf.
