A Complete Guide To Applying For The New Irish Rent Tax Credit
A Complete Guide To Applying For The New Irish Rent Tax Credit
Amanda Souza
If you’re living in private rented accommodation in Ireland, then you need to know about the new Rent Tax Credit. With this credit, you could be eligible to claim 20% of the rent you pay each year, and for some renters this amounts to a lot of savings – up to €500 per year for a single individual and €1000 for a married couple.
How Do I Know If I’m Eligible for Rent Tax Credit?
To find out if you’re eligible for the Rent Tax Credit, there are some key criteria that you should consider:
- Your Property Type: If you pay rent on your own home, or a second home that you (or your child under 23) work from or use to take part in an approved course, then the credit should be available to you, subject to some exceptions.
- Who You Live With: If you’re married or in a civil partnership, then you will be able to claim jointly for double the entitlement amount. If you rent with friends, then the tax credit will only be relevant to the amount that you pay on your own.
- You cannot claim if you are renting from your parent or your child
- You can claim for rent paid under a rent-a-room scheme where you do not rent the whole property
Other Support You Receive:
If you’re in receipt of other housing support, such as the Rent Supplement or the Housing Assistance Payment (HAP) then you won’t be eligible for the credit.
What If My Landlord Lives Abroad?
Even if your landlord lives abroad, there are still ways to claim your credit, depending on how you pay them. If you pay directly into their bank account (regardless of where their bank is based) you need to deduct the standard 20% tax rate from the total gross amount that you pay. This 20% is due to Revenue, so you should account to them with this figure – if you don’t do this, even if you have paid your landlord the full amount, you’ll still owe Revenue any tax that should have been deducted.
For example, if your landlord lives in France and you pay €1,200 per month gross rent. Then you need to work out the amount of tax to be deducted (€1,200 x 20% = €240). Now deduct the tax due from the gross rent you pay (€1,200 – €240 = €960). Which means that the net rent to be paid to your landlord per month is €960 per month and the amount due to Revenue is €240 per month.
To account for the tax, you can either reduce your tax credits and Standard Rate Cut-Off Point at your local Revenue Office, or pay Revenue directly through a tax return. This option is suitable for those who pay tax through the PAYE system – if you pay through self-assessment, the deduction should instead be detailed on your annual return.
How Do I Claim Rent Tax Credit?
Claiming your credit is easy, and can be done in a few simple steps:
1. Firstly, you must be registered with the Residential Tenancies Board (RTB) or have a licence agreement if you rent part of a property that the homeowner lives in.
2. Sign into your Revenue account
3. Under ‘PAYE Services’
4. Click ‘Review your Tax 2019–2022 and select year 2022
5. Under the ‘Statement of Liability’ section click on ‘Request’
6. Scroll down to ‘Complete your Income Tax Return’ which is called either a Form 11 or Form 12 depending on the compliance requirements of the individual
7. Click ‘Rent Tax Credit’ and complete the requested information which will include the following:
- PPS Number
- Length of lease
- Commencement of lease
- Rental amount
- RTB reference number
- Relationship with landlord
Why Work with Gallagher Keane Chartered Accountants?
We will professionally prepare and file your Irish tax return to make sure you receive all the tax credits that are applicable to you, and you will be fully compliant with Revenue.
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