Renters’ tax relief: What you need to know...

A NEW Rent Tax Credit was introduced in December, 2022, for people who pay for private rented accommodation.

The tax credit is 20% of the rent you paid in a year, up to a maximum of €500 per person, or a €1,000, if you are a couple jointly assessed for tax.

The credit is available for rent you have paid for:

Your home

A second home you use to take part in an approved course or your work

A property your child uses so they can take part in an approved course. This only applies if your child is under 23 at the start of their first year.

Q: Does the tenancy have to be registered with the Residential Tenancies Board (RTB)?

To claim the credit, your tenancy must be registered with the Residential Tenancies Board (RTB), unless you have a licence arrangement. For example, if you are renting a room in a home that you share with the owner, you have a licence agreement and this does not have to be registered with the RTB.

Q: How long will this tax credit be available?

The credit will be available for 2022 until 2025. You can claim the tax credit for rent paid in 2022 by making a tax return for 2022. You can claim the tax credit during the year for other years.

Q: Are there any exclusions?

The tax credit does not apply to payments for:

A security deposit

Repairs or maintenance

Board, laundry or other services

Your landlord must not be:

A housing association or approved housing body

Your parent

Your child

For a property used by your child to attend a course, the landlord cannot be any relation to you or your child.

Q: How do I claim the Rent Tax Credit?

You can claim the tax credit for rent paid in 2022 in myAccount:

1. Sign in to myAccount

2. Go to the ‘PAYE Services’ section

3. Click ‘Review your Tax 2019-2022’ and select 2022

4. Click ‘Request’ under the ‘Statement of Liability’ section

5. Scroll down to ‘Complete your Income Tax Return’

6. Click ‘Rent Tax Credit’ and complete the requested information

You can claim the tax credit in 2023 using Revenue’s Real-Time Credit facility which you can access through revenue.ie

Q: Can I claim the Rent Tax Credit if I am in receipt of HAP?

The credit is not available if you are getting housing support, such as the Housing Assistance Payment or Rent Supplement.

Q: What is the tax situation if my landlord lives abroad?

If your landlord lives outside Ireland and you pay your rent through a collection agent, you do not have to deduct tax from the rent. A collection agent is someone who will make annual tax returns for the non-resident landlord and account for any tax due to Revenue.

However, if you pay the rent directly to the landlord (including into their bank account, whether in Ireland or abroad), you must deduct tax at the standard rate (20%) from the gross amount that you pay.

This deduction is not your tax relief - it is tax payable to revenue from your landlord’s income.

For example, your landlord lives in Germany and you pay them gross rent per month of €1,000.

First, work out the amount of tax to be deducted (€1,000 x 20% = €200). Now deduct the tax due from the gross rent you pay (€1,000 - €200 = €800). The net rent to be paid to your landlord is €800 per month. The amount due to Revenue is the €200 per month that you deducted from the gross rent of €1,000.

Q: How do I account to Revenue for tax deducted from rent?

You must account to Revenue for the tax that you deduct from the gross rent. If you fail to deduct tax from rent that you pay directly to a landlord living outside Ireland, this will mean that you (and not the landlord) will be liable for any tax that should have been deducted.

If you pay tax under PAYE, you can account for it by reducing your tax credits and Standard Rate Cut-Off Point. You can notify your local Revenue Office and ask them to arrange this. Alternatively, you can make a tax return and pay the retained amount to Revenue.

If you pay tax under self-assessment, you should include the details of your rent on your annual return.

At the end of the year, you must give your landlord a completed Certificate of Income Tax Deducted - Form R185

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