Rent Tax Credit

Budget 2023 saw the introduction of a new Rent Tax Credit which is available from 2022 to 2025.

The credit is 20% of the rent paid in a year, up to a maximum credit of either €500 for an individual or €1,000 for a couple, for:

• A person’s principal private residence (i.e. sole place of residence).
• A person’s ‘second home’ which they use to facilitate their attendance at their employment, office holding, trade, profession or a Revenue approved college course.
• A property used by a child to facilitate their attendance at a Revenue approved college course.

Qualifying rents are any amounts paid in return for the use, enjoyment and special possession of the property but does not include payments made for security deposits, repairs or maintenance or any other services such as board, laundry, etc.

The main conditions of the relief are as follows:

• The property must be a residential property located in Ireland.
• The payment must have been made under a tenancy. Tenancy for rent tax credit purposes must fall under one of the following categories:
  • An agreement or lease which is required to be registered with the Residential Tenancy Board (RTB).
  • A licence for use of a room(s) in another person’s principal private residence. These arrangements are commonly known as “rent-a-room” or “digs”. (No RTB registration is required under these licences).
  • A tenancy for 50 years or more.
  • Tenancies under “rent to buy” arrangements.

• The landlord and the individual making the claim cannot be parent and child. If they are otherwise related the credit may be available as long as the RTB registrations have been complied by. Therefore, the credit is NOT available where the tenancy is under different arrangements such as “digs” or “rent-a-room”.
• The individual must not be a supported tenant (in receipt of any State housing supports such as HAP or RAS).
• The landlord must not be a Housing Association or Approved Housing Body.

You can claim the Rent Tax Credit for rent paid during 2022 by submitting a 2022 Income Tax Return to Revenue.  For 2023 and subsequent years the claim can also be made in-year using Revenue’s Real-Time Credit Facility.

If you are not registered for self-assessment, you can submit your Income Tax Return via Revenues’ MyAccount. By selecting “Review your Tax 2022” and requesting a “Statement of Liability”, you can input the information under the “Tax Credits & Reliefs” page.

The Real Time Credit Facility for 2023 and subsequent years enables you to claim the Rent tax credits in during the year. To claim the credit you must select “Manage your Tax 2023” and “Add new credits”, there it will give you the option to add the “Rent tax credit” and input the relevant information. Once the claim has been processed by Revenue, an amended Tax Credit Certificate is issued, and an amended Revenue Payroll Notification will be made to your employer.

For further information about the Rent Tax Credit, please contact us.