Updated: How to Claim the Rent Tax Credit in Ireland
Oct 12, 2023
by
Updated for 2024.
In Budget 2024 published on 10 October 2023, the Irish Government announced that renters would be eligible for a €750 annual tax credit starting from 1 January 2024. This is an increase from the original amount of €500 introduced in the previous year. In this updated article, we explore the latest changes to the Rent Tax Credit, an initiative that will help to reduce the burden of rent for tenants. Read on to discover what it is, who it’s for and how you can avail of it.
1. What is the rent tax credit?
The rent tax credit was originally announced in 2022 as part of Budget 2023. It aims to help tax-paying renters with the cost of living by allowing them to claim back up to €500 (as an individual) or €1,000 (as a jointly-assessed married person/civil partner). For the tax years 2024 and 2025, this credit was increased to €750 for an individual renter and €1,500 for a jointly-assessed couple.
The tax credit is available for the years 2022, 2023, 2024 and 2025. By claiming it, you can reduce the amount of income tax you pay for the year in question.
However, the credit does not apply to people who are already receiving housing support payments of any kind. These include:
Rent Supplement
Housing Assistance Payment (HAP Scheme)
The Rental Accommodation Scheme
Cost rental housing
The rent tax credit applies to people rather than properties, so every eligible person/couple can benefit, regardless of the number of people living in a household.
It’s important to note that the credit can only be claimed against typical rent payments. It cannot be claimed against:
Security deposits
Contributions to repairs of maintenance to the property
Board (meals), laundry or any other services
The rent tax credit for 2022 and 2023 can now be claimed by both PAYE taxpayers and self-assessed people (if eligible). PAYE taxpayers will soon be able to claim in real-time for 2024, while self-assessed people can claim for 2023 when they complete their tax return next year in 2024.
If you’d like to find out more about how the amount you could receive is calculated, please read Section 6 of Revenue’s Rent Tax Credit Guidance booklet.
2. What type of property must I be in to get the rent tax credit?
In order to get the tax credit, you must be paying rent for one of the following types of properties within the Republic of Ireland:
Your primary principal residence (main home)
A second property that you use to attend work or an approved educational course
A second property that your child (or the child of your spouse or civil partner) lives in while they attend an approved educational course. In this case, your child must be under the age of 23 at the beginning of the course’s first year. As well as this, your child must be in a type of tenancy that can be (and has been) registered with the RTB. Approved educational courses are typically undergraduate courses of 2 years or more, or postgraduate courses of 4 years or more. They are eligible for tax relief for third-level tuition fees. A full list is available on Revenue’s website.
Your landlord must not be a Housing Authority or Approved Housing Body. There are also some restrictions if you are related to your landlord (see question 3, below)
In order for your tenancy to qualify, it must be registered with the Residential Tenancies Board. However, in some cases, such as where the tenant is living in a room in the landlord’s house, registration is not necessary (see below). Instead, the tenant is licensed to live in the house as agreed.
In all cases, your rent payments must have been made as part of an official tenancy. For example, if you moved in unofficially with your friend and gave them money to help with rent, you would not be entitled to a tax credit.
3. What if I am in a rent-a-room or subletting situation?
If you are renting a room from your landlord, you are entitled to the rent tax credit. However, make sure to read question 3, below, which explains how being related to your landlord may affect this.
If you are subletting, you should be entitled to the credit, so long as the overall landlord has given their consent to the situation. And of course, the tenancy must meet all the other necessary conditions as well.
4. What if I’m related to my landlord?
Naturally, there are some restrictions to rent tax credit if you are closely related to your landlord. These restrictions vary depending on your rental situation.
If you are renting on your own behalf:
You will not receive the tax credit if your landlord is your parent or your child.
You may still receive the tax credit if your landlord is another type of relative such as a grandparent/grandchild, sibling, aunt/uncle or niece/nephew. However, in such cases, the tenancy must be of the type that can be registered with the RTB (and it must have been registered). For example, you will not receive the tax credit if renting a room in your grandparents’ home.
If you are renting on behalf of your child (or the child of your spouse or civil partner):
You will not receive the tax credit if you or your child are related to the landlord in any way.
Revenue’s Rent Tax Credit guidance booklet has lots of practical stories and examples of how the rent tax credit applies in different situations. It’s worth taking some time to go through it and see which seem relevant to you.
5. How can I claim the rent tax credit?
The rent tax credit is not automatically applied. If you think you are eligible, you need to take action to claim it. This action will look different for PAYE earners and self-assessed people. However, in both cases, you will need to do it online on the Revenue website, as described below.
Before you log on, take some time to gather all the information you need. This is listed on page 18 of the guidance booklet.
Claiming as a PAYE Taxpayer
Sign in to the myAccount system to begin the process. If you have not already registered, you can do so here.
Once in the system, you will need to fill in a Form 12 tax return for the relevant tax year. To do this:
1.
Select “Review your Tax”
2.
Enter the relevant tax year
3.
Select “Request” to request a Statement of Liability
4.
Scroll down and click on “Complete your Income Tax Return”
5.
On the “Tax Credits & Reliefs” page, select “You and your family” and then select “Rent Tax Credit”
6.
Continue through the claim process as instructed, entering the information you are asked for. Pages 20-32 of the guidance booklet give step-by-step visual instructions and help.
You will soon be able to claim your tax credit in real-time, for the current year. Keep checking Revenue’s Rent Tax Credit page for updates.
Claiming as a Self-Assessed Person
You will claim your rent tax credit as part of your annual Form 11 return. To complete this, sign into ROS. If you have not already registered, you can do so here.
Once in the system, work through the following steps:
1.
Open the “My Services” screen
2.
Select “File Return”
3.
Select “Income Tax” from the dropdown menu (this menu shows all the taxes you are registered for)
4.
Select the tax year you are working on
5.
Find the “Rent Tax Credit” section of the tax return and enter the information you are asked for
Where can I find out more?
For the most up-to-date information, keep an eye on Revenue’s Rent Tax Credit page, which gives a summary of the most important points. If you want to double-check conditions or find real-world examples of how the tax credit works for individuals, their Rent Tax Credit guidance booklet will be of help.
Citizens Information also has a helpful article on this topic. As well as this, their staff can chat with you in person about the tax credit and many other housing-related topics.
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