Jackie Cahill (Tipperary, Fianna Fail)
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236. To ask the Minister for Finance if parents who are paying private rent for their adult children who are in third level education can qualify for the €500 tax credit for renters to assist with the rising cost of living; and if he will make a statement on the matter. [8855/23]

Michael McGrath (Cork South Central, Fianna Fail)
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Finance Act 2022 introduced the Rent Tax Credit, which is provided for in s. 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 within the State 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 s. 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 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 s. 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.

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.