Section 473 of the Taxes Consolidation Act, 1997 provides tax relief at the standard rate to individuals who pay for private rented accommodation that is used as their sole or main residence. The level of rent qualifying for rent relief depends on an individual’s marital status and age. In Budget 2011, it was announced that rent relief was being withdrawn on a phased basis. No new claimants were allowed from 7 December 2010 but existing claimants will continue to receive the relief, on a reducing basis, with a complete cessation of the relief from 2018. This is in line with the schedule proposed for the withdrawal of mortgage interest relief. The scheduled withdrawal of rent relief is set out in the following table.
Tax Year
|
Reduction %
|
2011
|
20%
|
2012
|
20%
|
2013
|
10%
|
2014
|
10%
|
2015
|
10%
|
2016
|
10%
|
2017
|
10%
|
2018
|
10% to 0%
|
To phase out the remaining 60% of the relief over the next 3 years i.e. 2013 – 2015, would result in the following yields based on the 2010 costs of the scheme. A standard level of reduction of 20% per annum on the remaining maximum levels of relief is assumed.
Tax Year
|
Reduction %
|
Total Yield
€M
|
Increase in yield over existing reduction
€M
|
2013
|
20%
|
49.7
|
8.3
|
2014
|
20%
|
66.2
|
16.5
|
2015
|
20% to 0
|
82.8
|
24.8
|