Niamh Smyth (Cavan-Monaghan, Fianna Fail)
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134. To ask the Minister for Finance if he will review the unfair treatment when it comes to the rent tax credit not being made available to parents of students where the tenancy is of a type that is exempt from RTB registration, such as a ‘rent-a-room’ or ‘digs’-type arrangement (details supplied); and if he will make a statement on the matter. [2270/23]

Thomas Pringle (Donegal, Independent)
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243. To ask the Minister for Finance if his attention has been drawn to the fact that the rent tax credit will not be available to parents of students in cases in which the tenancy is of a type which is exempt from RTB registration, such as a rent-a-room or digs type arrangement; if he will consider providing a mechanism to include such persons; and if he will make a statement on the matter. [3177/23]

Thomas Pringle (Donegal, Independent)
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244. To ask the Minister for Finance if his attention has been drawn to the fact that parents who pay rent for their children who are studying abroad in approved courses cannot claim the rent tax relief on the rent they pay; and if he will consider providing a mechanism to include such persons; and if he will make a statement on the matter. [3178/23]

Michael McGrath (Cork South Central, Fianna Fail)
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I propose to take Questions Nos. 134, 243 and 244 together.

Finance Act 2022 introduced the Rent Tax Credit, which is provided for in section 473B of the Taxes Consolidation Act 1997. This is an income tax credit of up to €500 per year (or up to €1,000 for jointly assessed couples) which may be claimed in respect of qualifying rent paid in 2022 and subsequent years to end-2025.

Where a claimant is paying rent for a property used by his or her child, there are certain conditions which must be met in order for the claimant to be eligible to claim the Rent Tax Credit. These are:

- The claimant must have made a qualifying rental payment in respect of the property during the tax year;

- The property must be used by the claimant’s child for the specific purpose of facilitating the child's attendance at or participation in an approved course, as defined in section 473A of the Taxes Consolidation Act 1997;

- The property must be the child’s principal private residence during term time. Where the child returns to the family home outside of term time (including weekends) this will not preclude the claimant from receiving the Rent Tax Credit;

- Neither the claimant nor tenant can be related, in any way, to the landlord;

- The claimant's child must have been under 23 at the start of the tax year in which he or she first commenced an approved course in order for the Rent Tax Credit to apply;

- The claimant must not be a ‘supported tenant’ and the landlord must not be a 'specified landlord' within the meaning of section 473B of the Taxes Consolidation Act 1997; and

- The tenancy must be of a type which is required to be registered with the Residential Tenancies Board (RTB) and where the landlord has complied with any such registration requirement, which means that the credit will not be available where the tenancy is of a type which is exempt from RTB registration, such as a ‘Rent a Room’ or ‘digs’ type arrangement.

In designing tax reliefs, there is always a balance to be struck between providing support to as many people as possible, consistent with the overall policy intention behind the measure, and ensuring that there is an appropriate degree of control in the management of limited Exchequer resources. The current rules for the rent tax credit seek to achieve such a balance having regard to the more informal nature of rent-a-room or digs type arrangements as compared with those that must be registered with the Residential Tenancies Board.

In relation to the Deputy Pringle's question of parents paying for their children who are studying abroad and in a tenancy outside the State, the purpose behind the rent tax credit, introduced as a temporary measure, is to assist as part of the overall response to the accommodation shortage in the private rented residential sector in Ireland. More specifically, the aim is to provide some financial assistance to renters in that particular sector who may face high rental costs and who do not receive any other housing supports from the State. As such, the eligibility criteria for the credit specify that the rental property concerned must be a residential property located in the State.

The operation of the rent tax credit will be closely monitored by my Department in conjunction with Revenue in the coming months and the question of whether any further adjustments are needed will be considered in the context of the Budget and Finance Bill process later this year.