Rent a Room Relief

As the taxation system has been tightened up over the last few years, the number of sources of tax free income has reduced significantly. One relief that is still available, however, is Rent a Room Relief – in fact it has been enhanced in the recent Finance Act.

Income arising to an individual in respect of the letting, for residential purposes, of a room or rooms in his/her home, including income arising from the provision of meals or other services supplied in connection with the letting, is exempt from income tax, PRSI and USC where the income is below the annual limit for the tax year in question.

The income limit for the relief has been increased from €10,000 to €12,000 with effect from 1 January 2015 introduced by Finance Act 2014.

Revenue have recently clarified that income from the provision of accommodation to occasional visitors for short periods does not qualify for the relief – this is viewed as guest accommodation rather than accommodation for residential purposes. Lettings to students does qualify, but not in the case of guest accommodation, including where such accommodation is provided through online accommodation booking sites.

There are, of course, a number of criteria to be met in order to avail of the relief. We can help you ensure that you meet the requirements.

If you are already renting a room, you should check out the rules on Rent a Room relief to ensure that you can receive the income tax free. Or maybe you are looking at ways to increase your income – as long as you stay within the criteria this relief may be an opportunity to make some useful tax free income.

Please feel free to call Maura Duffy, Partner, at 01 2915265 if we can assist in any way.

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