Rent-a-Room and earn tax-free income

Have the kids flown the nest? Or do you have an extra room in your home sitting empty? Why not avail of the Rent-A-Room scheme? The great news is that money you will earn from this is tax free up to €14,000 per year under Rent-A-Room relief.

So what is Rent-A-Room relief?

If you rent a room or rooms out in your home to private tenants, the income you earn from rent will be exempt from income tax as long as it does not exceed a certain limit in a tax year.

Rent-A-Room relief was introduced with the aim of increasing the availability of rented accommodation.

The annual limit on tax-exempt income from this is €14,000.

What are the average monthly Rent-a-Room rents for each of the major cities in Ireland?

Can you avail of it?

If you rent out a room in your home (sole residence) on a long-term basis; then yes you can. You don’t need to own the property, as a tenant you could even sub-let to someone else (although you should check with your landlord first).

You can’t avail of the scheme if you are renting a room out to a direct family member (child or civil partner), although there is no restriction where rent is paid by other family members such as nieces and nephews etc.

Short-term lets are not covered by rent-a-room. Whomever rents from you must take the room with the intention of using it for the long-term. For example, a student renting a room in Dublin over the course of a college year is covered but renting it out every weekend to different people is not.

What else do you need to know?

Rent-a-room relief will not affect your mortgage interest relief or your exemption from Capital Gains Tax if you sell your home.

To list your room for free on Daft.ie click here or on the image below.

Depending on the type of ad you want to place you can avail of listing your room for free on Daft or you could upgrade to some of our other packages for even more exposure.

To find out more information on Rent-A-Room Relief check out Revenue.ie.