Rent a Room Relief
From 6 April 2001, where an individual rents a room (or rooms) in a “qualifying residence” and the gross rent received, including sums arising for food, laundry or similar goods and services and the income does not exceed €7,620 this income will be exempt from income tax by including it in the individuals tax return. Where more than one individual is entitled to the rent, the limit is divided between the individuals concerned.
The relief is available to individuals only. It does not apply to companies or partnerships. However, it can apply where individuals have the income jointly (for instance husband and wife where there is no partnership), there the limit can be divided between the individuals concerned. Individuals who rent as well as individuals who own their own home may avail of the relief.
A “qualifying residence” is a residential premises in the State, which is occupied by an individual as his/her principal private residence during the year of assessment.
Room rentals coming within the scope of this scheme will not affect the person’s entitlement to mortgage interest relief or the capital gains tax exemption on the disposal of a principal private residence.
There is no deduction for expenses made in ascertaining the rental income received and if the income does not exceed the limit in the year then those profits/losses are treated as “nil” for the year of assessment.
This income is not liable to either PRSI or the 2% Health Levy but it must be included on an individuals annual income tax return.
An individual may, if they wish, elect to have any income/losses from this source assessed under the normal rules for rental income, e.g., if there is a rental loss on the room(s). To elect, complete the relevant section on your annual income tax return.
I haven't filed a PAYE tax return in years but I always write directly to Revenue when there is any material change in my circumstances that requires their attention (either liabilities or overpayments).WizardDr said:You are right, but there are a million people who never make a tax return.
Well you could argue that all Revenue rules are technical but that doesn't mitigate the responsibility on people to play by the rules. I'm not sure what you mean by "pointless" but I assume you are referring to the declaration of income on which no tax liability arises? Surely this is not the only situation in which Revenue require the declaration of income etc. on which no tax liability arises?It would be the Revenue style to put in a technical piece like this.
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Like all the technical details, how is the Revenue policing these obligations it seems to create which are pointless?
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