Alan Dillon (Mayo, Fine Gael)
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96. To ask the Minister for Finance if he intends to expand the rent-a-room scheme; if he is considering additional supports to renters and landlords in the upcoming budget 2024; and if he will make a statement on the matter. [21430/23]

Michael McGrath (Cork South Central, Fianna Fail)
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The Rent a Room scheme was introduced in Finance Act 2001 as an incentive to encourage individuals to let rooms in their principal private residence as residential accommodation in order to bring about an increase in the availability of rental accommodation.

In accordance with section 216A of the Taxes Consolidation Act 1997, an individual who lets a room or rooms in her or his sole or main residence as residential accommodation may be exempt from income tax, PRSI and USC in respect of income from the letting where the aggregate of the gross rents and any sums for meals or other services supplied with the letting does not exceed the threshold for the year in question, which is €14,000 for 2023. Although the relief applies automatically, the amount of exempt rental income must be included in the individual’s tax return for the year in question.

The upper income threshold of €14,000 would allow an individual to receive income of up to €1,166.66 per month over a 12 month period under the scheme, without it giving rise to a tax liability.

The following table sets out data on the number of taxpayer units availing of the scheme, together with the Exchequer cost of the relief for the years 2016 - 2020 (the latest year for which data are available).

My Department is not aware of evidence which suggests that the current scheme is insufficient. While there was a reduction in Exchequer cost and number of claimants in 2020, this may be a result of the COVID-19 pandemic.

As the Deputy will appreciate, decisions regarding tax incentives and reliefs, whether in respect of the introduction of new measures or the amendment of existing measures, are normally made in the context of the annual Budget and Finance Bill process. Such decisions must have regard to the sound management of the public finances and my Department's Tax Expenditure Guidelines.

Tax reliefs, no matter how worthwhile in themselves, may serve to narrow the tax base and can make general reform of the tax system that much more difficult. While the use of tax measures to retain landlords in the rental market, or increase supply may be well-intentioned, Ireland’s history shows the issue of property-based tax expenditures should be approached with caution.

With that said, my Department continues to monitor all aspects of the property market, and I will continue to work with my colleagues in Government to ensure that any further interventions in the housing market are appropriately calibrated, represent the best use of scarce public resources and boost the supply of housing in both the public and private sectors.