Aodhán Ó Ríordáin (Dublin Bay North, Labour)
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255. To ask the Minister for Finance if additional taxation measures on rental income from short-term lettings will be introduced. [21095/20]

Paschal Donohoe (Dublin Central, Fine Gael)
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I am advised by Revenue that income arising from the provision of short term accommodation through online websites is subject to tax and the amount of taxable income is computed and charged to tax in the normal manner. Where the accommodation is provided as part of a trade carried on by the taxpayer, the income is taxable under Case I of Schedule D of the Taxes Consolidation Act 1997.However, where the provision of guest accommodation is occasional in nature, the income arising should be treated as miscellaneous income (taxable under Case IV of Schedule D). Under self-assessment rules, a person is obliged to submit an annual tax return showing his/her taxable income from all sources (including rental income) and pay the tax due on that taxable income.

PAYE taxpayers who have also received profit income from the provision of rooms through online accommodation sites also come under the self-assessment system and, therefore, have an obligation to make an annual tax return showing all sources of income and to pay the tax due on that income. However, in certain circumstances, PAYE taxpayers (excluding certain company directors) whose combined taxable profit from their non-PAYE income is less than €5,000 (or where the gross income is less than €30,000) per annum may elect to pay the tax due on such taxable profit through the PAYE system by reducing their personal tax credits. Where the tax due on all such income has been collected through the PAYE system for a tax year there is no obligation to complete a tax return for that tax year unless specifically requested to do so by Revenue.

Where taxpayers have already filed their tax return but have not declared profit income from sources referred to by the Deputy, or similar sources, they may self-correct their tax return without incurring penalties, provided it is completed by 31 October 2020 and they have not been notified by Revenue of a compliance intervention. It should be noted that interest on any outstanding tax amount will still be payable and will continue to accumulate until the outstanding amount is paid. For taxpayers who have not yet filed a tax return or have not declared relevant income, they should write to their local Revenue office, setting out details of any income received and related expenses for all relevant years.

Regarding rent-a-room relief, this is provided for in Section 216A of the TCA 1997. Under the legislation, sums arising to an individual in respect of the letting of a room or rooms as residential accommodation in his or her home and from meals or other services supplied in connection with the letting are exempt from income tax, USC and PRSI where these sums are below the annual limit for the tax year in question (€12,000 for 2015 and 2016 and €14,000 for 2017 and subsequent years) and certain other conditions are satisfied.

The purpose of the relief is to increase the supply of affordable rental residential accommodation by incentivising homeowners to rent out a room or rooms in their principal private residence to individuals. It applies where an individual is effectively using the room either on its own or in conjunction with other parts of the residence, as his or her home. The relief is not, and never was, intended to apply to income arising from the provision of guest accommodation to occasional visitors and Revenue has consistently clarified this point and I am aware that the clarification has also been subject to significant coverage.

Revenue has published comprehensive guidance across all taxes, including Income Tax and VAT, on the tax treatment of income from the provision of short-term accommodation, which the Deputy may find helpful. The information is available on Revenue’s website at .

Any proposals for changes to the current arrangements are matters that would have to be considered in the context of a forthcoming budget and/or Finance Bill.