Sunday, November 13, 2022

Kenneth Fox

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.

Speaking about the proposals, she said: “The rent-a-room relief has two primary advantages; it helps homeowners to make additional income, and it also increases the availability of rooms and the supply of accommodation.

“You can earn up to €14,000 per calendar year, completely tax-free, which equates to income of up to €1,166.66 per month under the scheme over a 12-month period. If it were to be increased to €18,000 per year, this would bring the income figure to up €1,500 per month.

“In 2018 according to the most recent figures available, some 9,240 people availed of Rent-a-Room relief at a cost of €19.7 million to the Exchequer, which amounted to an average tax saving per participant of some €2,100.

“At a time when we are facing acute pressure in the rental accommodation sector, it makes perfect sense for property owners to consider renting out a spare room to those in need of accommodation.

“It could also apply to older people whose children have left home, and they may wish to boost their income in retirement, or first-time homeowners with larger mortgages who could do with the help from such a measure.

She said to qualify for rent-a-room relief, the room or rooms being let must form part of the residence occupied by the individual receiving the rent as her/ his sole or main residence during the tax year.

“A self-contained unit, such as a basement flat or a converted garage attached to the person’s home, can qualify for this relief as well,” she said.

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