Dublin: The rent relief of €500 or €1,000 a year will come into effect in the years 2023 to 2025, but will be backdated to apply for rent paid in 2022, Finance Minister Paschal Donohoe said.
The minister said: "I am introducing a new rent tax credit worth €500 per year for taxpayers who pay rent on their main private residence. This measure, aimed at those who do not receive other housing support, can be claimed in 2023 and subsequent tax years, but can also be claimed in respect of rent paid in 2022. It is estimated that 400,000 people will benefit from the tax credit.
When tax credit is availed it reduces the amount of tax you pay. The tenant's landlord must be registered with the Rental Tenancy Board to claim it. However, the credit is bad news for unregistered landlords who, given the high value of the credit, may have their tenants send their details to the Revenue. The RTB previously estimated that such landlords could face fines of up to €4,000.
Is your property exempt from registration?
The registration of some tenancies in some properties may be exempt. The RTB remit does not extend to:
- tenancies in local authority housing or under shared ownership lease arrangements.
- holiday letting agreements.
- the Rent a Room scheme (where the landlord and the tenant share the same self contained property).
- if a tenant lives with the spouse, civil partner, parent or child of the landlord and there is no written letting agreement in place.
- if the property is a short term let.
Renters in Ireland will receive a new tax credit of €500 a year following the announcement of an €11 billion budget for 2023. This means renters can apply for the tax credit later this year. This will apply to taxpayers who rent out their "principal private residence" - it will not be available to those who receive other state housing supports such as Housing Assistance Payment.
You need to make a claim for rental tax credit. You can claim the credit for the tax year 2022 in your income tax return available from January 2023 onwards. The Revenue will publish detailed guidance on how to claim before then. However the information reflects the content of Finance Bill 2022. This information is subject to change until the enactment of the Finance Bill in December 2022.
Formal detailed guidance on rental tax credit will be published at that time. An overview of the main provisions currently provided in the Finance Bill is given below.
Rent tax credit may be available where you rent, subject to a number of conditions:
Your main private residence, another property you use to facilitate your attendance at work or an approved course, and a property used by your child to attend an approved course. Applicable conditions relate to:
Location and use of the rental property
The type of tenancy, the relationship between you or your child and the landlord, as well as your child's age and the type of course they are attending.
Maximum credit available to you each year
€1,000 if you are a married person or civil partner assessed jointly or €500 in all other cases.
How to apply for tax credit?
Tenants must apply via Revenue's website https://www.revenue.ie/ to receive tax relief.
Detailed guidance on the provisions of the Rent Tax Credit will be published once the Finance Act is signed into law. The guidance will include practical examples of when the credit can be claimed. It will also include detailed guidance on how to claim credit.
Only one credit can be claimed per person per year, although it is proposed to double the value of the credit in the case of married couples and rent-paying civil partners.
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