Dáil Éireann Debate, Wednesday - 27 September 2023
65. Deputy Paul Kehoe asked the Minister for Finance if he will consider extending the rental tax credit to children of landlords renting from parents, in the instance of full compliance with all taxes and RTB and market value rent; and if he will make a statement on the matter. [41817/23]
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 may be claimed in respect of qualifying rent paid in 2022 and subsequent years to end-2025.
One of the conditions attached to the credit relates to the relationship between the claimant, tenant and landlord.
Where the relationship between the claimant and the landlord is that of parent and child, or vice versa, the rent tax credit will not be available in any instance. This will be the case irrespective of the nature of the tenancy concerned and its Residential Tenancy Board registration status.
The rationale behind the prohibition on tenancies of this nature is that if such arrangements were allowed to qualify for the relief, it would leave the tax credit open to possible manipulation where parents and their children could collude to create a tax advantage for either party, which was not warranted.
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.
The operation of the Rent Tax Credit is closely monitored by my Department in conjunction with Revenue and the question of whether any further adjustments are required is for consideration in the context of the Budget and Finance Bill process.
