If you live in private rented accommodation in Ireland and pay income tax, you may have right for tax relief on part of your rent.
To claim tax relief, you must be paying rent for private rented accommodation which is used as your sole or main residence. This includes accommodation such as a bedsit, flat, apartment or house.
You cannot claim tax relief for rent paid as follows:
- To a local authority or a State Agency
- Rent paid under a lease agreement for 50 years or more
Landlords living in Ireland
If your landlord is resident in Ireland, a receipt for rent you have paid must be provided if and when it is requested by Revenue. This rule applies regardless of whether you pay your rent directly to the landlord or to an agent on behalf of the landlord. Each receipt must show the following:
- Landlord’s name, PPS Number and address
- Amount of rent which you have paid
- Period of time covered by the receipt
Landlords living outside Ireland
If your landlord lives outside Ireland and you pay rent directly to them or to their bank account located in Ireland or abroad, you must deduct tax at the standard rate (20%) from the gross amount which you pay.
This deduction is not your tax relief, it is tax payable to Revenue from your landlord’s income.
For example, if your landlord lives in Germany and you pay him/her gross rent per month of €1000. Firstly, calculate the amount of tax to be deducted (€1000 x 20% = €200).Now deduct the tax due from the gross rent you pay (€1000 – €200 = €800). Your monthly rent paid to your landlord is €800 per month. Your monthly return paid to Revenue is €200 per month.
You must account for the tax you deduct by making a tax return to Revenue and paying over the tax you have deducted from your landlord. You can make a return immediately but in practice this rarely happens. Instead, if you are a PAYE employee you can pay over the tax deducted when you submit your annual Tax Return Form 12 to Revenue. If you pay tax by self-assessment, you can account for the taxes you deduct in your annual self-assessment Tax Return Form 11 which you send to Revenue.
If you fail to deduct tax from rent you pay to a landlord living outside Ireland will mean that you (and not the landlord) will be liable for any tax which should have been deducted.
Tax relief at the standard rate of 20% on private rented accommodation is available whether your landlord lives in Ireland or abroad. From 1 January 2008 tax relief on rent is as follows:
- Age Single Tax Allowance Married/Widowed Tax Allowance
- Aged under 55 years (max. relief) €2,000 €4,000
- Aged over 55 years (max. relief) €4,000 €8,000
To calculate what this is worth to you each year after tax, you multiply the tax allowance amounts above by 20%. So:
- For those aged under 55: this means, the maximum amount a single person under 55 can get is €400 (€2,000 x 20%) for rent paid in 2008. The maximum amount a married couple or widowed person can get is €800 (€4000 x 20%) for rent paid in 2008
- Over 55: this means, the maximum amount a single person over 55 can get is €800 (€4,000 x 20%) for rent paid in 2008. The maximum amount a married couple or widowed person can get is €1,600 (€8,000 x 20%) for rent paid in 2008
How to apply
To claim rent tax relief you must complete Form Rent 1 (pdf) and send to your tax office. (Copies of the form are also available from your local tax office). If you have any difficulty completing the form or supplying any of the information requested, staff in your tax office will be happy to help you.