Dáil Éireann Debate, Wednesday - 17 September 2014
207. Deputy Arthur Spring asked the Minister for Finance if the rent a room scheme should be altered in order that only income above the €10,100 amount should be taxed and not the whole amount if the income exceeds the €10,100 amount. [33293/14]
View answerSection 216A of the Taxes Consolidation Act 1997 provides for the rent-a-room scheme. This scheme was introduced in Finance Act 2001 as an incentive to encourage individuals to let rooms in their principal private residence in order to bring about an increase in the availability of rental accommodation, particularly for the student sector.
The scheme provides an exemption from Income Tax, PRSI and USC on rent received where a person rents out a room or rooms in his or her principal private residence and the rent received does not exceed €10,000 per year. This was increased from €7,620 in Budget 2008.
In order to qualify for the exemption, it is necessary for the residential premises to be situated in the State and occupied by the individual as his or her sole or main residence during the tax year.
The relief only applies to individuals. It does not apply to companies or partnerships. In addition, an individual cannot avail of the relief in respect of payments for accommodation in the family home by a child of the individual. There is no restriction where rent is paid by other family members, for example, nieces or nephews.
The latest figures available relate to the tax year 2012 when the cost of the relief was estimated at €5.9 million and was availed of by 4,073 claimants. This equates to rental income of €22.9 million. The corresponding 2011 cost was €5.6m and was availed of by 3,920 claimants.
An exemption from tax of €10,000 equates to rent received of approximately €833 per month. Figures provided by the Revenue Commissioners indicate that the majority of claims relate to rent received of less than €4,000 per annum or €333 per month:
|
Rent Receivable |
Number |
|
€9,001 - €10,000 |
512 |
|
€8,001 - €9,000 |
360 |
|
€7,001 - €8,000 |
441 |
|
€6,001 - €7,000 |
332 |
|
€5,001 - €6,000 |
655 |
|
€4,001 - €5,000 |
569 |
|
€4,000 & lower |
1,204 |
Therefore, to raise the limit could be unwarranted. However, as with all tax reliefs, the rent-a-room scheme will be considered as part of the forthcoming Budget and Finance Bill.
