Rent a Room Relief for Homeowners

I am a student who is struggling to find accommodation close to my college. Please highlight in your legal column the fact that private homeowners can rent out a room in their home and avail of tax relief on the rental income. It might help some students currently coping with an accommodation crisis.

If a private homeowner decides to rent a room (or rooms) in their home to private tenants, the rental income earned may be exempt from income tax, PRSI and USC provided this income from rent and related services does not exceed €14,000 in a tax year.

The relief applies only to residential tenancies, not to short-term guest arrangements. The occupants must be using the room on a long-term basis. For example, renting a room to a student for the academic year is covered, but taking in guests for short breaks is not.

Homeowners will NOT qualify for this tax relief if any of the following apply:

  1. Income from rent and related services exceeds €14,000 in a tax year.
  2. Renting a room to a son or daughter.
  3. Renting a room to short-term guests.

Any such rental accommodation provided is essentially a room in a private home and is therefore not covered by landlord and tenant legislation. Tenants will therefore be staying under a Licensee Agreement, not a Tenancy Agreement.

Any such Licensee Agreement should set out terms in writing to include such details as the rent payable and the manner in which it is payable i.e. by cash, cheque etc; the term of the tenancy; notice periods required should either party wish to end the arrangement; arrangements for payment of utility bills; rules regarding guests etc. This Agreement should be signed by both parties and a copy retained by each.

Locations

ATHLONE

Oak House,
39-41 Mardyke Street,
Athlone,
Co. Westmeath
N37 TA44

Tel: (090) 647 8433
Email: info@bccsolicitors.ie

GALWAY

9 Gray Office Park,
Galway Retail Park,
Headford Road,
Galway City
H91 WC1P

Tel: (091) 511 421
Email: info@bccsolicitors.ie

DUBLIN

24–26
Upper Ormond Quay,
Dublin 7

Tel: (090) 647 8433
Email: info@bccsolicitors.ie

MOATE

Main Street,
Moate,
Co. Westmeath
N37 EW70

Tel: (090) 648 2090
Email: info@bccsolicitors.ie

LANESBOROUGH

Main Street,
Lanesborough,
Co. Longford
N39 C8Y7

Tel: (043) 332 1200
Email: info@bccsolicitors.ie

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