18 December 2023
By Roger Kennedy
roger@TheCork.ie
If you’re a renter in Ireland, you might be eligible for a tax credit that significantly lowers your income tax bill. The Rent Tax Credit is a scheme that allows you to deduct 20% of your annual rent payments from your income tax liability.
This guide will explain how the rent tax credit works, who can claim it, and how to apply.
Let’s get started.
What is the Rent Tax Credit and How Does it Work?
The Rent Tax Credit is a tax relief measure introduced in 2022 to help renters cope with Ireland’s high cost of living. It works by giving you a credit of 20% of your rent payments for the year up to a certain limit. You can claim this credit when you file your annual income tax return. For example, if you paid €10,000 in rent in 2022, you can claim a credit of €2,000 (20% of €10,000) against your income tax for that year.
Who Can Claim the Rent Tax Credit?
The Rent Tax Credit is available to anyone who pays rent for their main residence in Ireland. However, there are some conditions and exclusions that apply. You cannot claim the credit if:
- You are renting from a close relative, such as a parent, child, or sibling.
- You are renting under a rent-a-room scheme or a similar arrangement.
- You are renting from your employer or as part of your employment contract.
- You are renting from a local authority or a housing association.
- You are renting under a long-term lease (more than 50 years) or a life interest.
How Much is the Rent Tax Credit and How Long Does it Last?
The amount of the Rent Tax Credit depends on your marital status and the year you are claiming. The table below shows the maximum credit you can claim for each year from 2022 to 2025.
| Year | Single | Married (Joint Assessment) |
| 2022 | €500 | €1,000 |
| 2023 | €500 | €1,000 |
| 2024 | €750 | €1,500 |
| 2025 | €750 | €1,500 |
The credit is capped at the income tax you owe for the year. You can only claim up to that amount if your income tax liability is less than the maximum credit. For example, if you are single and paid €8,000 in rent in 2022, your maximum credit is €500. However, if your income tax liability for that year is only €300, you can only claim €300 as your credit.
The Rent Tax Credit is scheduled to end in 2025. However, if you are a PAYE taxpayer, you can still claim the credit for rent payments made in 2023 when you file your income tax return.
How do you apply for the rent tax credit?
To help you save some money on your taxes, here is a step-by-step guide on claiming the Rent Tax Credit if you are a PAYE taxpayer and paid rent in 2022.
- First, sign in to my account using your username and password.
- Go to the ‘PAYE Services’ section and click ‘Review your Tax 2019–2022’. Then, select 2022 as the year you want to review.
- After that, click ‘Request’ under the ‘Statement of Liability’ section. This will allow you to access your income tax return for 2022.
- In the ‘Tax Credits & Reliefs’ page, select ‘You and your family’ and look for ‘Rent Tax Credit’. Click on it to open a form to enter the details of your rent payments.
- Finally, fill in the information requested, such as the amount of rent paid, the name and address of your landlord, and the period covered by the rent. Check the box that says ‘I confirm that I have a valid tenancy agreement’ and click ‘Continue.’
That’s it! You have successfully claimed the Rent Tax Credit for 2022. You can check your Statement of Liability to see how much tax you owe or refund you are entitled to.
The Rent Tax Credit is a valuable benefit that can help you save money on taxes by renting in Ireland. Make sure you meet the eligibility criteria and apply for it before it expires in 2025.