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Explainer: There's a new rent tax credit, how can I avail of it and when will it be paid?

Does my landlord need to be registered? What if I’m on HAP?

Image: Shutterstock

Updated Sep 28th 2022, 7:58 AM

A NEW TAX credit for renters was announced as part of Budget 2023.

The payment was billed as part of a suite of measures announced by government to tackle the housing crisis.

It could make a difference in many people’s pockets but there are also concerns that it might not reach some who need it most. 

Here’s an overview of what you need to know.

How much is it worth?

Up to €500 per calendar year. As with other tax credits it will be set against your other liabilities and credits, so you might not necessarily get a cheque in the post for €500.

Married couples and civil partners will be able to claim together for double that amount.

I’m renting with other people – do we all claim together?

No. This is an individual tax credit, so it’s only relevant to you and the amount of tax you pay.

The exception is married couples and civil partners, who will be able to claim together for double the amount.

What years can I claim for?

It will apply for 2022, and can be claimed again from early 2023. It will run up to 2025.

Does my landlord need to be registered with the Residential Tenancies Board?

A thorny question for a country in the middle of a housing crisis.

Minister for Finance Paschal Donohoe told reporters yesterday that yes, your landlord must be registered, while Minister for Housing Daragh O’Brien has said that a tenant will “claim it on the basis of the registered tenancy number that they have”. 

Landlords are required by law to register their tenancy but this isn’t always done, as was the case with numerous TDs who rented out properties.

A spokesperson for the Department of Finance said that “rent-a-room arrangements and student accommodations where the property is the tenant’s principal private residence and where the tenant pays sufficient rent (rent paid of €2,500 in a tax year would be sufficient to avail of the full credit)”.

Will I need to provide proof of the rent I pay?

Yes, but only if requested to do so. The spokesperson for the Department said the tenant “would be obliged to provide details of the property and of the landlord to Revenue and may have to provide a receipt for rent paid if required by Revenue to do so”.

I receive the Housing Assistant Payment (HAP), can I claim this tax credit?

No, this measure is only for those who do not get any other housing supports.

This requirement has been criticised by housing charity Threshold, who called for a proportional increase in HAP rates, and Focus Ireland who also highlighted the potential exclusion of low-waged workers.

How do I claim it and when will it be paid?

The credit will be applied for in the same way people apply for other tax credits, i.e. through Revenue.  

Minister Darragh O’Brien said the details of how to claim the credits will be made clear in the upcoming Finance Bill but that he expects it will be done through Revenue’s website. 

He said:

That should be pretty simple to do but we need to get the legislation that underpins the change done in the Finance Bill. From the passing of the Bill and shortly thereafter, people will be able to claim credit for 2022. Realistically, you’re probably looking at that payment being made in early 2023 but you will be applying for it through the Revenue system.

The Finance Bill will likely be revealed in late October and could be signed into law by the end of this year.

How many people are expected to be eligible?

Around 400,000, with a cost to the Exchequer of €200 million. 

Is this the first time we’ve had a rent tax credit?

Nope. A previous relief, calculated at the standard rate of 20%, was phased out in 2017. You had to have been renting as of 7 December 2010 to claim it, and there were some additional terms and conditions attached.

What has the general reaction been?

Mixed. Charities have welcomed it with caution, as it will provide some much-needed relief, but said Budget 2023 lacked any substantial and meaningful measures to address the rental crisis – both at a systematic level and for people’s pockets.

A common theme among opposition spokespersons has been that not only is it equivalent to a small proportion of what people will pay, but that it could be quickly ‘gobbled up’ by rent increases by opportunistic landlords.

Additional reporting by Jamie McCarron

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About the author:

Nicky Ryan

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