Rent-a-Room Scheme for Tax Free Income

This is a very good tax relief scheme for individuals who sublet part of their principal private residence for residential purposes while they continue to occupy the property at the same time. Typically this would involve renting out a bedroom and sharing facilities between all occupants of the property.

No tax is payable on such income provided it does not exceed the income exempt amount See Below .

In addition you are not required to register with the PRTB and it does not affect the capital gains tax exemption for one’s principal private residence.

Tax Year

Income amount exempt

2013 €10,000
2014 €10,000

2015

€12,000

2016

€12,000

2017 Onwards

€14,000

Also, the owner can continue to claim the normal mortgage interest tax relief due on the property.

This relief allows home owners to generate an income from their property to assist in paying the mortgage without having to pay tax thereon. It is proving to be very popular with categories such as First Time Buyers who would have spare accommodation in their newly acquired house or apartment.

For the tax year 2007 onwards the exemption is not available for children paying a rent to their parents for a room in the family home.

 

The Rent-a-Room Scheme does not apply to income arising from letting periods which do not exceed 28 consecutive days !  The Rent-a-Room Scheme does not to apply to Airbnb or similar short-term tourist accommodation based on home-sharing.