Everything To Know About The Rent Tax Credit

The newly introduced Rent Tax Credit for 2022-2025 has been the talk of the town for months now. It comes as a much-needed financial relief for people in Ireland who are living in rented accommodations.

Anyone who has been renting a property from 2022 or entered a new rent in 2023 is eligible for claiming rent tax credit. Notably, the credit structure has been made differently for couples and individuals renting a property. The credit significantly reduces the income tax amount that one owes by the amount of the credit claimed.

Here is everything you need to know about the claim:

Different types of credits available:

• For individual taxpayers, the tax rebate is up to €500 for the year 2022. The tax credit for the year 2023 is also €500. Individuals who are renting private accommodation due to work are also eligible.
• For couples that are living together in the property, the credit they can get is up to €1,000 for 2022, while they can also receive a tax credit of €1,000 in 2023 against their pay-as-you-earn (PAYE) income.

Aside from renters living in a rented property, here are other categories that can claim a rent tax credit as well:

• Parents who are paying rent on behalf of their children attend university. They can claim credit of up to €500 per parent. Thus, such families can claim a credit of €1,000 annually. Here, the child or the rentpayers are not related to the landlord in any case.

Who will be eligible for the rent tax credit?

While the rebate is meant for renters, there are still a few criteria that need to be fulfilled. For instance, the property that is being rented out should be registered with the Residential Tenancies Board (RTB). Notably, rent-a-room living arrangements are an exception and might not be included in the rent tax credit.

In the event that a parent is paying rent for the students and they are working full-time (the parents), they are eligible to claim the maximum limit against the tax credit.

It is noteworthy that only those who are renting a living space in Ireland are eligible for the rent tax credit. Households on social housing support are not eligible for these kinds of credits.

If you are planning to apply for the rent tax credit, please keep the following documents handy:

• Complete and correct address of the rented property
• The total amount of rent you are paying for the property
• The date you started renting the property
• Complete name of the landlord (should not be a relative) or the letting agent

How can I claim for the rent tax credit?

To claim your rent tax credit, the following are the steps you need to take:

• Before the year’s end, fill and submit the completed Form RCT1 and submit it to the Revenue.
• You will be asked to share the details of the landlord, the property and the rent paid during the year.
• Walk through the claim process as directed and process to file your income tax.

The rent tax credit is a respite for renters

The renter’s tax credit is a huge step towards offering respite to Ireland renters. It encourages renters to get a rebate on the amount they are paying as rent annually. If you are stuck and unsure how to initiate the process, you can contact experts like Irish Tax Rebates to get the help you need. Filing your returns before 31st December is crucial to ensure you are getting the eligible credit.