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Ireland: TD requests that the government increase the rent-a-room tax incentive

    Photo: Gareth Chaney/Collins

There are calls to increase tax relief for the Government's rent-a-room scheme.

The programme currently allows householders to earn up to €14,000 a year - completely tax-free - by renting out a room in their home.

Fine Gael's Emer Higgins says it is a great idea for boosting household incomes while reducing the accommodation shortage.

Deputy Higgins - who is a member of the Oireachtas Housing Committee - says it makes great sense for older people whose children have left home - or first-time mortgage holders in need of extra cash.

She is suggesting the threshold for relief should be increased to €18,000 euro per year - which would return an income of 15-hundred euro per month.

She added of the proposals: "The rent-a-room relief has two key advantages; it helps homeowners make additional revenue and it also boosts the availability of rooms and the supply of lodging." Under the system, you are allowed to make up to €14,000 in a single calendar year, which translates to up to €1,166.66 in monthly income. If it were raised to €18,000 per year, the income amount would rise to €1,500 per month.

According to the most recent data available, 9,240 people used the Rent-a-Room exemption in 2018, saving an average of €2,100 in taxes for each participant at a cost of €19.7 million to the Exchequer.

"It makes perfect sense for property owners to take into account renting out a spare room to individuals in need of housing at a time when we are facing significant strain in the rental accommodation sector.

"It may also be applicable to elderly adults whose children have moved out of the house and who may want to increase their retirement income or first-time homebuyers with larger mortgages who could benefit from such a policy.

According to her, the room or rooms being rented out must be a portion of the residence that the person receiving the rent occupies as her/his single or main residence during the tax year in order to qualify for the rent-a-room relief.

She added that a self-contained property attached to the person's home, like a converted garage or basement flat, might also be eligible for this reduction.

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