Rent a Room scheme 'a great opportunity' to earn €14K tax free

The potential to earn €14,000 tax free by renting a room in your home to lodgers "is a great opportunity", according to a Fianna Fáil senator of an unheralded scheme.

The Rent a Room Scheme may have been available for years, but Senator Robbie Gallagher suspects it remains relatively unknown.

He says the scheme is now particularly relevant because of student accommodation difficulties and notes that many generations of students have availed of “digs” under the scheme.

“The rules are simple but strict, the scheme is for homeowners, not for landlords or people with second properties, so it involves your home, where you live all the time and you are renting out a room in your home," the Monaghan man explains.

"A homeowner can earn up to €14,000 in total without paying any tax on it. The scheme applies to long term rentals so AirBnB doesn’t count and you must be careful not to stray over the €14,000 because if you earn more than that you will be taxed on the whole sum. Finally, you must declare your income to Revenue, even if it is at or below €14,000, this is how you get the tax relief.”

He suspects not enough people are aware of the Rent a Room scheme. Senator Gallagher, who has regularly campaigned for greater awareness on tax allowances and rebates, says that with the current challenges to the cost of living, it is more important than ever that people claim back money that they are entitled to.

“There are a wide range of allowances and exemptions for people that can be claimed and the average rebate is over €800. Medical expenses, charitable contribution deductions, child tax credit, credit for sick leave for self-employed individuals, credit for family leave for self-employed individuals, student loan interest deduction and tuition and fees deductions are some of the allowances that are available to people."