Seán Kyne (Galway West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

13. To ask the Minister for Finance if he will confirm regarding the rent a room tax relief scheme if the income up to €10,000 threshold per annum is exempt from PRSI in addition to the exemption from standard income tax; and if he will make a statement on the matter. [1553/14]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Section 216A of the Taxes Consolidation Act 1997 provides for the rent-a-room scheme. This scheme was introduced in Finance Act 2001 as an incentive to encourage individuals to let rooms in their principal private residence in order to bring about an increase in the availability of rental accommodation, particularly for the student sector.

The scheme provides an exemption from Income Tax, PRSI and USC on rent received where a person rents out a room or rooms in his or her principal private residence and the rent received does not exceed €10,000 per year. This was increased from €7,620 in Budget 2008.

In order to qualify for the exemption, it is necessary for the residential premises to be situated in the State and occupied by the individual as his or her sole or main residence during the tax year.

The relief only applies to individuals. It does not apply to companies or partnerships. In addition, an individual cannot avail of the relief in respect of payments for accommodation in the family home by a child of the individual. There is no restriction where rent is paid by other family members, for example, nieces or nephews.

The latest figures available relate to the tax year 2011 when the cost of the relief was estimated at €5.6 million and was availed of by 3,920 claimants. This equates to rental income of €21.7 million. The corresponding 2010 cost was €5.3m and was availed of by 3,770 claimants.

Figures relating to PRSI foregone are not captured by the Revenue Commissioners. Any queries in relation to PRSI should be directed to the Minister for Social Protection.