Micheál Martin: Rent-a-Room scheme "something we should consider expanding"

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Eblanoid

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From Irish Independent: Budget bust-up as Simon Harris and Micheál Martin clash over crucial plans for housing (19 Sep 2026) [paywalled]):
Mr Martin said the Coalition was looking at ways of “sweating the existing housing stock”.

“The Rent-a-Room scheme, for example, has been very effective for student accommodation and accommodation more generally. That is something we should consider in my view, because I am not sure we have sweated the existing asset enough,” he said.

Rent-a-Room allows people to earn up to €14,000 a year tax-free if they rent out a room in their home to private tenants.

“That’s something we should consider expanding, in my view,” Mr Martin added.
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It's been €14,000 since 1 Jan 2017 (see Rent-A-Room Relief: Part 07-01-32: 5. Limit on amount to be exempted: 5.1 Exempt amount [PDF]).
It'd be ~€18,000+ now if it had been index-linked to CPI inflation...
 
Rent-a-Room: €14,000 a year tax-free, no RTB registration, no Part 4 rights, no rent caps, no minimum standards, no deposit rules, no dispute resolution. The occupant is a licensee who can be put out with a week's notice. The Taoiseach thinks it should be expanded.

Now the same period for anyone providing accommodation under the RTA Act:
  • Tax at marginal rate plus USC and PRSI — over 52% (over 55% for some). The one relief aimed at small landlords is worth €1,000 at the standard rate, with many hoops and a four-year clawback most were advised to avoid.
  • Rent capped at 2% through years of higher inflation. A real-terms cut, written into statute for all sitting tenants pre 1 March.
  • Regulation: registration, minimum standards, BER, rent-setting statements, prescribed notices, prescribed service, RTB copies on prescribed deadlines, and your name on a public register.
  • Criminal sanction from 14 September: class A fine, up to twelve months' imprisonment, prosecuted by the RTB itself.
So: provide a home with security of tenure and you are taxed at over half, capped below inflation, regulated at every step and exposed to prosecution if the paperwork is wrong — which the RTB's own guidance caused for years. Provide a room with no security and no protections at all and you get €14,000 tax-free, with an offer of more.

I've nothing against Rent-a-Room, and the €14,000 should have been indexed. But notice what's being said. The way to get more accommodation is to expand the kind that carries no tenant protections, because the kind that does has been made unattractive deliberately.

If the answer to the housing crisis is more accommodation with no tenant protections, that tells you what the protected sector has been made into.
 
stormy said:
If the answer to the housing crisis is more accommodation with no tenant protections, that tells you what the protected sector has been made into.
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It is all politics. Tweaking the tax free limit for something doesn't generate a massive pushback. However, anything that might be seen as pro-landlord, gets massive push back.

Anything that might help landlords has to be packaged with anti-landlord measures to prove that they are loyal to the tenant side of the thing.

It is also likely that many people who rent-a-room don't actually see themselves as landlords at all.
 
LarryScott said:
It is also likely that many people who rent-a-room don't actually see themselves as landlords at all.
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You still need to draw up your licensee agreement, house rules and declare your income.

Thankfully a lighter level of admin but I still class myself as a landlord for the purposes of renting out my spare room.

Not sure what other way there is to define the role of being in charge of renting out a space / property / room other than, landlord / landlady
 
To get the €14k in 2017 you probably had to rent two rooms.

Now one room will get you there or close to it. So someone could take in one less person.

I’m not sure if moving it to €18 would be enough. If you get €12k from one person would you drop it to €9k and get a second.

It must be one of the biggest tax give aways. Where else can a normal person get €14k tax free every year. Roughly €5.5k of free money.

When you look at the value of tax free money for the new saving screen it will be a fraction of that.

Who benefits most?

I would say relatively young people who have the means to buy a property early in life, before they have kids or perhaps even a long term partner. Basically at a time when they might be renting a room in someone else’s house. €14k goes a long way to the mortgage.

I know some families do it. Fair play but must less common. Often wouldn’t have a spare room.
 
LarryScott said:
It is also likely that many people who rent-a-room don't actually see themselves as landlords at all.
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Indeed — and it's a pity the nomenclature carries more weight than the substance. @Sarah Ryan does the licensee agreement, the house rules and the tax return and calls herself a landlord; the only real difference is that her occupant has no security of tenure. That's the arrangement the State rewards with €14,000 tax-free.
 
Again, the incoherence of government policy is incredible at this point.

The PRS, where tenants always had protection of some sort (renewable one year leases granting rights) and had a large amount of freedom to do as they wanted in the accommodation, is now dying away due to a drive to "protect" tenants via the Residential Tenancies Acts 2026 - eviction bans, sub-inflation rent caps, fines, criminal sanctions and convoluted paperwork. There is also taxation and it is not socially acceptable to be a landlord.

As a result, the government has now decided to expand a sector where tenants have absolutely zero protection:

1. Rent can be increased overnight,
2. You can be evicted at no notice and for any or no reason
3. You can be subject to all sorts of petty rules and regulations - when you can use the kitchen, when you can have a shower and these can be changed at a moment's notice.
4. You can't have friends around and you certainly can't have a relationship
5. Families can't use the arrangement at all, it is only for single people who stay single

So renters are being driven from a sector which took all comers, where they always had rights and protections, where they had the freedom to organise their lives as they wanted, to a sector where they are completely unprotected.

Now, as with landlords, the vast majority of rent a room landlords are absolutely fine and anxious to treat the tenant fairly. However a minority aren't and the tenant can do absolutely nothing. A minority of PRS landlords are dreadful as well, yet in order to "protect" tenants there we've been hit with a sledge hammer of eviction bans, criminal prosecutions etc. etc.
 
Greenbook said:
4. You can't have friends around and you certainly can't have a relationship
5. Families can't use the arrangement at all, it is only for single people who stay single
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4 and 5 might be rules enforced by some hosts; they're not part of Revenue's rules. For some RaR hosts (e.g. me) it's practical to allow friends/relationships/families, for others it isn't.

One reason Martin might be flying this kite is there are a 10s of thousands of Ukrainians about to lose their below-market-rate accommodation, because state-provided/funded accommodation is being withdrawn (e.g. Citywest) and the Accommodation Recognition Payment (ARP) for domestic hosts is being phased out. Increasing the RaR amount might encourage existing RaR hosts to increase the number of licencees that they host (as @faketales said), or encourage new RaR hosts.

Another way of thinking about the RaR scheme in general is that licensees, in exchange for "fewer" rights, get "rewarded" with access to cheaper accommodation than the RTB-regulated market provides.

Increasing rights for licencees might end up worsening the accommodation crisis, similarly to the way that regulations that outlawed bedsits did, as some RaR hosts might simply stop hosting altogether.
 
Eblanoid said:
4 and 5 might be rules enforced by some hosts; they're not part of Revenue's rules. For some RaR hosts (e.g. me) it's practical to allow friends/relationships/families, for others it isn't.
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I'm sure the vast majority of hosts are quite reasonable about it. However, as a landlord unless there is anti-social behaviour (and even then I'll be in difficulties) I have no say whatsoever over who a tenant invites in to the house and what they get up to in the house. Even if the tenant moves somebody in, I'll have a difficult time getting that person out. An RaR landlord is quite entitled to ban visitors entirely and I am sure some do.

Eblanoid said:
Another way of thinking about the RaR scheme in general is that licensees, in exchange for "fewer" rights, get "rewarded" with access to cheaper accommodation than the RTB-regulated market provides.
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They are now likely more expensive or on par with rent controlled PRS properties. A tenant in a pre-March house share could be paying €600 or €700 a month, perhaps less. I would think that current RaR rates are on par with this, though perhaps I am wrong.

Eblanoid said:
Increasing rights for licencees might end up worsening the accommodation crisis, similarly to the way that regulations that outlawed bedsits did, as some RaR hosts might simply stop hosting altogether.
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They seem to see that in the RaR section and understand that granting RaR tenants 6 year or permanent tenancies would kill they sector. Likewise RaR tenants being able to remain in situ without paying rent for 3 years or more and being able to take a case against the landlord if he tries to get them out. They understand that that would kill the sector.

They don't seem to see this at all in the PRS. It is all about more and more 'protections' for tenants and more and more punishments and criminal sanctions for landlords. All that does is reduce the size of the PRS meaning that those looking to rent have to move to a sector where they have no protections at all.

Just to be clear, I've nothing against RaR. It is a very good idea. The vast majority of hosts do an excellent job and for say an 18 year old student away from home for the first time, RaR is likely a better idea than the PRS.
 
faketales said:
would say relatively young people who have the means to buy a property early in life, before they have kids or perhaps even a long term partner
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I would say they are actually the minority. Few young people managed to buy a property on their own. Empty nesters would make I think an important cohort.

Eblanoid said:
Another way of thinking about the RaR scheme in general is that licensees, in exchange for "fewer" rights, get "rewarded" with access to cheaper accommodation than the RTB-regulated market provides.
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Cheaper is all relative. The current rent index for new tenancies is about 1800, lots of properties are not single rooms.
 
Premos said:
Cheaper is all relative. The current rent index for new tenancies is about 1800, lots of properties are not single rooms.
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The PRS is rent capped, so that, as we've seen from the Rent Register, kept a lid on what was changed.

RaR wasn't and could increase up to the €14k limit.

I'd think prices are pretty similar at this stage with only post March PRS rentals being higher.

Martin's increase in the tax free limit will likely do nothing but increase RaR rents!
 
DannyBoyD said:
Where is this regulation?
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There is no such regulation of course.

What I am saying is that it is really only suited to single people. If you are renting out the spare bedroom in your house which is what RaR is aimed at, you aren't going to rent it to a family of four.

Likewise, if you have two spare bedrooms in your house, you could, in theory rent to a family of four, but that would mean you have two parents and two children or teenagers in your house. You'd get the same or more money if you rented to two singles which half the noise, half the wear and tear, children out to school in the morning, possibly a child minder in house during the day, children home all summer, extra use of the kitchen, bathrooms etc. etc.

So an RaR landlord is quite entitled to rent out his spare room to a family, the practical reality is that practically none do. Much easier and less hassle to get a single person or two single people in.
 
Perhaps they should extend it into a Rent-a-House Scheme and encourage more rental supply, from the sort of owners who can't afford to devalue their property by signing a lease, or risk a non-paying tenant staying for 2 or 3 years..

Owners could agreed to let other people use all the rooms in a house - for whatever length of time suits them both and at whatever hire cost they agree on.
 
polecon said:
Owners could agreed to let other people use all the rooms in a house
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This is almost already the case, as the RaR scheme sets no limit on the number of licensees or rooms used, just the €14k tax-free limit for the residence (and the proposal is to include a "garden home" in the residence's curtilage in that RaR limit).
 
faketales said:
I’m not sure if moving it to €18 would be enough. If you get €12k from one person would you drop it to €9k and get a second.
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Two students for 8 or 9 months. That's also nice for the owner as you could have the house to yourself for weekends and holidays.

I know an elderly lady in Dublin who has one student and would probably take the second if the tax threshold was increased.
 
polecon said:
Perhaps they should extend it into a Rent-a-House Scheme and encourage more rental supply, from the sort of owners who can't afford to devalue their property by signing a lease, or risk a non-paying tenant staying for 2 or 3 years..
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No, no, no @polecon The PRS will collapse unless you have loads of inflexible rules, micromanage everything and leave paying rent the choice of the individual tenant.

All this does show the government's completely differing views of two essentially similar structures. If I buy a house to live in myself and rent out a room at say €800 per month, I'm a great fellow and I get a tax break. I'm clever to boot - my lodger is paying my mortgage.

On the other hand if I buy a 3 bed to rent out and charge €800 per room I'm evil, greedy and can't be trusted. Even worse my tenants are paying my mortgage and buying the house for me.
 
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