Patrick Costello (Dublin South Central, Green Party)
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477. To ask the Minister for Finance given the rent-a-room scheme promotes a mechanism of tax relief, the measures the Government will introduce to ensure that such relief is only made available to homeowners who act in good faith when promoting a vacancy and attracting tenants. [38797/23]

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 (TCA), 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.

To qualify for rent-a-room relief, the total payment for the letting must be below the annual limit, which is €14,000. In establishing whether the income exceeds the limit, the gross amount is taken into account and no deduction is allowed for any expenses that have been incurred in connection with obtaining the income. The relief does not apply to short term lettings of 28 or fewer days, except in certain defined circumstances (lettings to students, disabled individuals, and “digs” for a minimum of four consecutive days per week for at least four consecutive weeks). There are also restrictions relating to lettings to immediate family members and lettings paid for by the individual’s employer.

Further information on rent-a-room relief is available from the Revenue website at:

www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/land-and-property/rent-a-room-relief/index.aspx.

As the Deputy will appreciate, in relation to the scheme, my role relates to taxation policy. Broader matters concerning landlords and tenants are, in the first instance, matters for the Minister for Housing, Local Government and Heritage.

Patrick Costello (Dublin South Central, Green Party)
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478. To ask the Minister for Finance if his Department is conducting any performance review for the rent-a-room relief scheme to outline the effectiveness of the scheme, issues arising from its implementation and exploring whether there is any benefit from the scheme to the wider issue of student accommodation. [38818/23]

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. Individuals who let a room/s to students and meet the above eligibility criteria are able to avail of rent a room relief.

Although the income is exempt it must be included in the individual’s tax return for the year in question. This relief does not apply to companies or partnerships.

Initially, in 2001, the upper income threshold was set at £6,000 but this has been increased several times over the intervening period (most recently in Finance Act 2016) to €14,000.

The scheme is not currently the subject of a review by my Department of type suggested by the Deputy.