Written answers
Thursday, 23 November 2023
Department of Finance
Tax Credits
Brendan Smith (Cavan-Monaghan, Fianna Fail)
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98. To ask the Minister for Finance if he will ensure that tax relief for parents in respect of the accommodation costs for students attending further or higher education colleges is applicable in respect of all students, whether studying in this jurisdiction or elsewhere; and if he will make a statement on the matter. [51577/23]
Brendan Smith (Cavan-Monaghan, Fianna Fail)
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142. To ask the Minister for Finance if he will amend the conditions applicable to eligibility for the rental tax credit for parents of students in relation to accommodation costs while attending further or higher education college to include students studying outside of this jurisdiction; and if he will make a statement on the matter. [51578/23]
Michael McGrath (Cork South Central, Fianna Fail)
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I propose to take Questions Nos. 98 and 142 together.
The Rent Tax Credit, as provided for in section 473B of the Taxes Consolidation Act 1997 (TCA 1997), was introduced by Finance Act 2022. This is an income tax credit which may be claimed in respect of qualifying rent paid in 2022 and subsequent years to end-2025.
For the tax years 2022 and 2023, the maximum value of the credit will be €1,000 per year in the case of a jointly assessed married couple or civil partners, and €500 in all other cases. I have brought forward a measure in this year’s Finance Bill that will further increase the value of this credit. Thus, following enactment of the Bill, the value of the credit for the 2024 and 2025 tax years will increase to a maximum of €1,500 for a jointly assessed couple and €750 in all other cases.
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 the State. 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. Owing to this, the eligibility criteria for the credit specify that the rental property concerned must be a residential property located in the State.
As such, neither students attending university outside the State nor their parents are currently entitled to the Rent Tax Credit in respect of rent which they have paid for accommodation outside the State.
As the Deputy will appreciate, 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. I have no plans to further extend the rent tax credit at this time.
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