Dáil Éireann Debate, Tuesday - 14 July 2015
255. Deputy Terence Flanagan asked the Minister for Finance regarding the tax exemption threshold for the rent a room relief scheme, his plans to increase the threshold from €10,000 in the upcoming budget, given that the current housing crisis is acutely felt by third level students returning to colleges in September 2015; and if he will make a statement on the matter. [29135/15]
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 €12,000 per year. This was increased from €10,000 in Budget 2015 in order to further encourage individuals to provide rental accommodation in their homes to students and other tenants.
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.
