Rent-a-Room Relief explained: earn up to €14,000 tax-free

What is Rent-a-Room Relief?

Rent-a-Room Relief is an Irish tax exemption (section 216A of the Taxes Consolidation Act 1997) for income from letting a room or rooms in your sole or main residence for residential use.

Since 1 January 2017 the annual limit has been €14,000. Where two people share the income, such as a married couple, the limit is divided between them.

Who qualifies?

According to Revenue’s guidance, the relief applies to individuals (not companies) who let a room in the home they live in as their sole or main residence. You don’t have to own the home: it can also apply if you rent your home yourself, subject to your own agreement.

The room must be used as residential accommodation, meaning the lodger lives there as their home.

What counts towards the €14,000?

Revenue counts the gross amount you receive for the room, plus money for meals, cleaning, laundry and similar services you provide with it. No expenses can be deducted when checking whether you’re under the limit.

When doesn’t the relief apply?

Revenue lists several situations where the relief is not available:

• Payments from your own child (or your spouse’s or civil partner’s child) for living in the family home.
• Payments connected with your job, where you are an employee or office holder of the person paying.
• Short lettings of 28 consecutive days or less, such as tourist stays, unless the person is a student, is staying at least four days a week for four weeks or more (Monday-to-Friday “digs”), or is incapacitated.
• A self-contained unit that is separate from your home, such as a detached cabin.
• Rooms used for business rather than as someone’s home.

Do I still need to tell Revenue?

Yes. The relief applies automatically, but Revenue says you must still declare the exempt income on your tax return in the exempt income section. If you’re a PAYE taxpayer, you can do this through myAccount.

You can also choose to opt out in a given year and be taxed in the normal way, which some people do if they have large expenses to claim.

Does it affect my other tax reliefs?

Revenue’s guidance says income under Rent-a-Room Relief does not affect the Mortgage Interest Tax Credit, and since 2001 it does not restrict the Capital Gains Tax exemption on selling your main home. The income is also exempt from PRSI and USC when the conditions are met.

Common questions

Is the Rent-a-Room limit €14,000 per person or per home?

It’s €14,000 per individual for the year, but where two people are entitled to the income (for example a couple), the limit is divided equally between them.

What happens if I earn €14,500?

If your gross income from the room goes over the limit, the whole amount is taxed in the normal way, not just the €500 over.

Can I use Rent-a-Room Relief for Airbnb guests?

Generally no. Since 2019 the relief doesn’t apply to stays of 28 consecutive days or less, apart from students, Monday-to-Friday lodgers and people who are incapacitated.

Can I claim it if my lodger is a student for one term?

Revenue’s guidance says the relief covers lettings to students, including for an academic year or term, provided the other conditions are met.

Is this tax advice?

No. This is general information based on Revenue’s published guidance. Check Revenue’s website or speak to a tax adviser about your own situation.