New Rent Tax Credit

Updated December 2023

Overview

As part of the Government’s approach to dealing with the inflation crisis and rising rents in the rental market, the 2023 Finance Act introduced a new rental tax credit for renters in the private sector, which is being enhanced in the 2024 budget. Those who are in receipt of other State housing supports such as HAP (Housing Assistance Payment) will not qualify.

The rent tax credit is available for the tax years 2022 to 2025 (inclusive) and the maximum value of the credit is:

• For 2022 & 2023: €1,000 per year for jointly assessed married couples or civil partners, and €500 in all other cases.
• For 2024 & 2025: €1,500 per year for jointly assessed married couples or civil partners, and €750 in all other cases.

Most tenants have already received their credit for 2022 by making a claim in their Form 12 or Form 11 tax return which was due on 31 October 2023. Going forward the credit may be claimed in tax credit certificates and if filing a form 11, the details will need to be included therein also.

Type of Renting

The credit is broadly available in 3 circumstances and different rules apply to each.

It can be claimed for rent payments made for a residence that is:

1. Your home (principle private residence) or
2. A second home for facilitating work or
3. For a qualifying child attending college.

Key rules to qualify

•       The renting must be in Ireland.

•       You can’t be related to the landlord as parent or child.

•       In general, the landlord must be registered for PRTB (exception for rent-a-room type situations as long as you/child are not related to the landlord*)

•       The landlord cannot be a Government Minister or a Commissioner of Public works who owns the property in an official capacity and is not a housing authority or housing association.

•       Student must be under 23 at beginning of relevant year.

•       Student must be in a third level college.

* related in this sense is other than parent or child, e.g. aunt, cousin, grandparent etc

The Revenue has provided lots of detail about the new Rental Tax Credit and you can read much more here

Example:

Catriona moves into rented accommodation on 1st May 2022. Her monthly rent is €800.

At the start of her tenancy, Catriona also paid a €800 security deposit, which will be returned to her when the tenancy ends. For the purposes of the rent tax credit, Catriona incurs qualifying payments of €6,400 (€800 x 8) during the 2022 tax year. Her €800 security deposit is disregarded for this purpose.

This article has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only.