In the recent Irish budget for 2023, Finance Minister Paschal Donohue announced a new tax credit for renters in Ireland.
The rent tax credit will come as a relief to renters who have seen a steep rise in the cost of living in the country over the past few months.
But how exactly does it work and who can claim it?
In this blog post, we'll outline all you need to know about the new Irish rent tax credit!
What was announced in Budget 2023
When announcing Budget 2023, the Government highlighted their aim to lessen the overall burden of taxes on workers in Ireland.
Housing and renting were two of the key areas targeted by Government officials looking to offer tax breaks for workers.
As well as the new rent tax credit, the Help-To-Buy scheme has been extended until the end of 2024.
What is the new Irish rent tax credit?
The new scheme aims to provide a new tax credit for renters in the private sector.
This means that it is only relevant to those who are not in receipt of other State housing supports such as HAP (Housing Assistance Payment).
As well as this, one credit can be claimed per tennant, so if there are five people renting a house, all five can claim the credit.
The credit can be claimed for payments made for an individual's principal private residence, on a residence that facilitates work or the residence of a qualifying child attending college.
Is this different from the original tax credit for renters?
There was a previous relief that was available to be claimed at the standard rate of 20%, however, it phased out in 2017.
The figure has changed from a percentage to a fixed number for this relief.
How much is the Irish rent tax credit?
The new rent tax credit is worth €500 per year for a single individual and €1,000 for a married couple.
Currently, anyone who meets the criteria (more on that below) and is renting in Ireland at the moment can avail of it.
It is understood that nearly 40,000 people will be eligible to apply for it.
Can I claim the Rent Tax Credit if my landlord is not RTB registered? What should I do if I don't know my landlord's RTB number?
In order to claim this credit, your tenancy must be signed up with the Residential Tenancies Board (RTB), except if you have a licence arrangement.
An example of this would be if you are renting a room in a home that you are sharing with the owner, you'll have a licence agreement which won't have to be registered with the RTB.
Is there a requirement to upload any receipts in relation to the rent tax credit?
When you apply for the Irish Rent Tax Credit, you will not need to upload receipts as evidence of your rental agreement.
However, as with all other tax credit claims, if Revenue ask you to provide evidence, you will need to do so.
So, it is important that you hold on to any receipts you have as evidence.
Can you claim the Rent Tax Credit if the contract is not in your name?
Yes it is possible to do this - you claim the credit for the part of rent that you paid for.
Again, Revenue may request that you provide supporting documentation at a later point in time - like a copy of any bank statements that show the money was transferred to the landlord.
You can also use a letter from the landlord confirming that you actually live there, letter from other tenants, utility bills etc.
Is it possible to claim the Rent Tax Credit without my landlord's PPS?
Knowing your landlord's PPS is not necessary for claiming the Rent Tax Credit.
Therefore, you can claim the credit without knowing the PPS number.
Is the new rent tax credit backdated?
The good news is that yes, the rent tax credit is backdated!
While it comes into place from the 2023 tax year up to 2025, it has been backdated for rent paid in 2022 also.
That means that if you rented property in 2022 it's a good idea to check if you can claim the credit.
The average Irish tax refund is €1,880
How can I claim the rent tax credit?
There are two ways to secure this credit.
One of the ways to avail of this credit is applying through your MyRevenue account.
You must ensure that your landlord is registered with the Rental Tenancy Board for it to be relevant to you.
Taxback.com can also do it for you!
When we file your Irish tax return, we'll ensure you receive every tax credit that is applicable to you!
So, instead of worrying about what you need come tax time, you can sit back and relax knowing you will be fully compliant with Revenue.
Can I still claim the rent tax credit if I did not rent for the full year?
Yes - you will be happy to know you can!
The tax credit you receive will depend on the total rent you paid throughout the year. For example, if you only rented from March to April 2022 and paid a total of €1,000 rent the maximum credit you can claim is €200 (€1,000 x 20%) if you are single or jointly assessed.
However, the maximum credit for a single individual is €500 and €1,000 for a married couple.
How can Taxback.com help me?
At Taxback.com, we take all of the stress out of Irish taxes.
Of course, you can always file your taxes yourself.
However, when you use our service, we guarantee:
- MAXIMUM Irish tax refund - We get every cent possible for our customers
- Stress-free service - No complicated forms
- FULL Irish tax compliance - We'll make sure everything is in place with Revenue
So, why not get a FREE refund estimation here?