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Tax Tips October 2017

Rent a Room Relief

If you let a room in your home during 2016 the income you received may be exempt from tax but you are not exempt from filing a tax return by 31 October 2017 (14th November if filing and paying through ROS).

Conditions

With effect from 1 January 2017, the gross income which is exempt from income tax, PRSI and USC was increased to €14,000 (€12,000 in 2016).  Gross income is the total income before you deduct expenses.  Subject to conditions, an individual does not have to own the property to claim relief. However, once the above exemption limit is exceeded in a calendar year, the total amount of the income becomes taxable.

You cannot claim the relief against income received for the use of the room(s) from:

  1. Your child or civil partner,
  2. An employer/employee,
  3. Short term guests including those who book accommodation through online booking sites.

How to claim the relief

Those who claim rent a room relief for 2016 must declare this income using the ROS to enter the amount of exempt income on a Form 11 if a self-assessed tax payer. Individuals must use ‘My Account’ on ROS to enter the amount of exempt income on a Form 12 if their main source of income is from a PAYE employment.

If you do not wish to receive this relief you can request to have the income taxed.  You must request this in writing on or before your tax return’s filing date.

There is a four-year time limit to claim relief.