Dáil Éireann Debate, Tuesday - 24 January 2023
228. Deputy Mick Barry asked the Minister for Finance if tenants in the private rented sector and those renting under a rent-a-room scheme can claim the rent tax credit where their landlord is not registered with the Residential Tenancies Board; and if he will make a statement on the matter. [2749/23]
View answerThe Rent Tax Credit, as provided for in section 473B of the Taxes Consolidation Act 1997 (TCA 1997), was introduced by Finance Act 2022 and will be available in respect of qualifying payments made during the 2022 to 2025 years of assessment inclusive. Qualifying payments must be made under a tenancy.
A tenancy for this purpose is a rental arrangement which falls into one of the below categories:
1. An agreement, contract or lease which is required to be registered with the Residential Tenancy Board (RTB) under Part 7 of the Residential Tenancies Act 2004. Where a rental arrangement is of a type which is required to be registered with the RTB, the landlord must have complied with this registration obligation in order for the claimant to receive the Rent Tax Credit.
2. A licence for the use of a room, or rooms, in an individual's person’s principal private residence. Such rental arrangements are not generally required to be registered with the RTB under Part 7 of the Residential Tenancies Act 2004, and therefore availability of the rent tax credit in such circumstances is not dependent on the tenancy being registered.
Consistent with point 2 above, a person renting under the rent-a-room scheme may claim the rent tax credit subject to compliance with other conditions applying to the measure, e.g. that they pay sufficient tax in the tax year to avail of the credit.
However, I should point out that it is not possible for a parent to claim the tax credit in respect of rented accommodation used by his or her student child where the tenancy relates to a rent-a-room or ‘digs’ type arrangement. This condition was introduced as part of the governance arrangements for the relief.
In designing tax measures, there is a balance to be struck between providing support to as many people as possible consistent with the overall policy intention behind the measure and ensuring that there is an appropriate degree of control in the management of limited Exchequer resources. The current rules for the rent tax credit seek to achieve such a balance having regard to the more informal nature of rent-a-room or digs type arrangements as compared with those that must be registered with the Residential Tenancies Board.
Further details in respect of the tax credit, including comprehensive guidance on the full range of conditions which must be met and how to make a claim, can be found in Tax and Duty Manual Part 15-01-11A at:
www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-15/15-01-11A.pdf
Finally, the operation of the rent tax credit will be closely monitored by my Department in conjunction with Revenue in the coming months and the question of whether any further adjustments are needed will be considered in the context of the Budget and Finance Bill process later this year.
