Tax free income is not too common. But if you’re renting a room or rooms in your home, you may be entitled to “Rent A Room Relief” and earn up to €12,000 tax free.
Here’s 11 Things You Need To Know!
- The €12,000 limit includes any amounts you receive for utilities, food, laundry and other costs;
- You must keep your total Rent A Room Relief income below €12,000 per year, or the whole amount becomes taxable;
- You must be living in the same house;
- You don’t have to own the property to qualify for the relief – you could be a tenant subletting the property;
- Short term lets such as AirBnb do not qualify for the Rent A Room relief; the scheme only relates to long term lettings (for example renting a room to a student for the academic year);
- The rooms must be used for residential purposes. Rooms rented for business purposes do not qualify for the relief;
- You do not qualify for Rent A Room Relief if the income received is from your son or daughter – but there is no similar restriction for other family members such as a niece or nephew;
- Rent A Room Relief does not affect your mortgage interest relief or your Capital Gains Tax (CGT) exemption if you sell your home;
- You don’t have to register with the PRTB as a landlord;
- Renting out a self-contained unit such as a converted garage attached to your home can qualify (but you must register with the PRTB when renting out a self-contained unit);
- Although the income is tax free, you still need to include the details on your annual tax return. If you’re not required to submit an income tax return for other reasons, you do not have to submit a tax return to declare this income.
If you need to submit an income tax return, we can help!
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