Rent-A-Room Relief

In Ireland, Section 216A of Taxes Consolidation Act, 1997 provides for this relief, popularly known as ‘Rent-a-Room Relief’. The relief provides for tax free income up to €12,000   for renting accommodation in residential house. The relief was introduced with the objective of augmenting the availability of rented residential accommodation.

As per clause 4.3 of eBrief No. 21/15 published on Irish Revenue website, this relief is not available for renting of accommodations to occasional visitors for short periods .

The said clause is extracted as under:

"Income from the provision of accommodation to occasional visitors for short periods, including, for example, where the accommodation is provided through online accommodation booking sites, does not qualify for relief as the visitors use the accommodation as guest accommodation rather than for residential purposes. Income from guest accommodation such as a bed and breakfast or a guesthouse operation is generally treated as trading income (Case 1) and not rental income (Case V). This type of income, even where it is under the relevant limit, does not qualify for rent-a-room relief."

According to the relief, individuals may have tax free income up to €12,000 per year for letting accommodation (one or more rooms) in their home residence for residential purpose (not used for business) without a charge to tax. However the relief is not available in respect of payment of room rents by the child of the individual, or the individual’s civil partner.

An individual having multiple residence can avail this relief only in respect of his/her sole or main residence. Also a self-contained unit that is adjacent to the residence but not actually attached to it cannot qualify for the relief.

Limit for Exemption as now and in the past is as under:

Where more than one individual is entitled to the income, the limit shall be divided equally between them

eBrief No. 21/15 Click Here >>