Jack Wall (Kildare South, Labour)
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Question 234: To ask the Minister for Finance the tax benefits available to a person seeking to lease a section or sections of his or her home to non-related tenants; the regulations covering such leasing; and if he will make a statement on the matter. [4653/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I am informed by the Revenue Commissioners that money that is received by an individual in respect of the letting, for residential purposes, of part of that individual's home is exempt from income tax, income levy, PRSI and the health levy where it is below €10,000. Any amount received for meals, cleaning, laundry or other similar goods and services that are incidentally provided in connection with the residential use is also taken into account. This relief is known as Rent-a-Room relief.

In establishing whether the income arising in respect of residential accommodation and ancillary services exceeds the exempt limit, the gross amount of that income is taken into account. No deduction is allowed for any expenses that have been incurred in connection with obtaining that income. Where the gross income exceeds the €10,000 exemption limit in a particular year the full amount is taxable and not just the amount that exceeds the limit.

The residence must be situated in the State and be occupied by an individual as his/her sole or main residence during the particular tax year. The individual does not have to own the residence and it could, for example, be occupied as rented accommodation. It is not possible to let an entire residence because the room(s) that is let must form part of the residence and the residence must be occupied by the individual receiving the rent as his/her sole or main residence. The relief does not apply where the part of the residence that is let is used for business purposes.

The availability of certain other tax reliefs is not affected by the receipt of income that is exempted from tax under the rent-a-room relief scheme. These include an individual's entitlement to mortgage interest relief on his/her principal private residence, the exemption from Capital Gains Tax on gains arising from the disposal of an individual's principal private residence and owner-occupier relief where the residence is situated in a tax incentive area such as an urban renewal scheme area. Additionally, an individual who pays rent for private rented accommodation that he/she uses as his/her main residence is entitled to claim tax relief for the rent paid where that individual sub-lets part of the accommodation. A tenant of an individual who is claiming rent-a-room relief may claim tax relief for rent paid.

First-time buyers and certain owner-occupiers can obtain relief from stamp duty on the purchase of a house/apartment. A clawback of the relief arises if rent is obtained from the letting of the house/apartment in the two-year period from the date of purchase. However, such a clawback does not apply where rent is received for the letting of furnished accommodation in part of the premises by an individual who owns and occupies the premises. The individual must continue to occupy the premises as his/her only or main residence for the required two-year period. Unlike rent-a-room relief for income tax, there is no upper limit on the amount of rent that can be received in relation to stamp duty where part of the premises has been let.

I am also informed by the Revenue Commissioners that a guidance note on the Rent-a-Room relief scheme is available at www.revenue.ie in the "Leaflets" section of the website.