23/02/2023

23/02/2023

Rent Tax Credit

As a method of assisting people during the current cost of living crisis, the Government has introduced the new rental credit which will help people with the cost of high rents.
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The credit is available to claim in respect of the tax years ended 31 December 2022 – 2025. You may avail of this credit if you: 
  1. Pay rent towards your principal private residence, 
  2. Pay rent to live in a residence for work / approved education purposes;
  3. Pay rent in order for your dependent child to attend an approved course.
The credit of €500 for a single-assessed person, or €1,000 for a jointly-assessed couple may be claimed from as early as January 2023. An apportioned credit may apply where the rent paid in a calendar year falls below the specified amount of €2,500 or where the income tax liability is below €500.

Restrictions:

  • The credit is not available where the tenant is a supported tenant eg: where the tenant is in receipt of the HAP support scheme
  • Any tenancy held under the rent-to-buy scheme is ineligible for the rent tax credit
  • If the landlord and tenant or claimant are related such as parent-child, aunt/uncle, grandparent type relationship, the rent tax credit will not be available
  • Where a tenancy is required to be registered with the RTB, the landlord must comply with the obligation
  • The credit cannot be claimed where the landlord is a Minister of the Government or Commissioner of Public Works
  • When calculating the qualifying rental payment, the following items are excluded from the payments made:
    • Security deposit
    • Contribution towards any repairs or maintenance of the property, or
    • Additional services provided by the landlord, the cost of which is included in the rental payments, such as laundry, cleaning etc.

Example:

Matthew, a single individual, moves into his new rental accommodation on 1 July 2022, his rental payments are €1,000 and his deposit is €1,000.  Included within his rental payments is a cleaning and laundry service on a weekly basis. A similar service would cost €150 per month.  He decides to replace the curtains in the room for remotely controlled black-out blinds at a cost of €500.  Rental payments (€1,000 x 6 months) 6,000 Security deposit excluded Cleaning services (€150 x 6 months) -900 Replacement blinds excluded Total cost for 2022 5,100 Potential credit available  500    Based on the above and depending on Matthew’s tax liability for the year, Matthew may be entitled to a tax refund of €500.