Rent a Room Scheme and Revenue

Feemar5

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I intend to rent a room in my home to a student in September - I wonder what I need to do before that to avail of the Revenue Rent a Room Scheme. As our local Revenue Office is closed to callers I would appreciate any advice. Do I have to notify Revenue in advance with the name of the person etc.,
 
No need to do anything beforehand. Just file a tax return including the details, after the year end.
 
do you need to file a tax return at all? I thought that you would not need to do anyhing.
 
Yes, you need to file a return but there is no tax due as long as you are under the threshold amount.
 
why do you need to file a tax return and whats the consequence of not filing a return?
 
Under S.216A(4) "Rent a room relief" it states "The provisions of the Income Tax Acts relating to the making of returns shall apply as if this section had not been enacted." This means that if you are a chargeable person you must file a return. Under S.959B(1)(a) of the TCA 1997 FA2016 the income thresholds has been increased from €3,174 to €5,000. i.e. pre 2017 €3,174. This threshold will include your Rent a room income "as if the act S216A had not been enacted". If you do not fall into this chargeable person category there is no legal requirement to file a return unless the revenue ask you to submit same.

However in the Revenue guidance 7.1.32 "Rent a room relief" Paragraph 6.1 states "Although the relief applies automatically, an individual who is required to submit an annual return of income must, nevertheless, enter the amount of exempt rental income on the return (in the ‘Exempt Income’ section of the form). The usual return of income is the Form 11. Revenue may also require certain individuals who are taxed under the PAYE system and who also have non-PAYE income to submit an annual return of income (Form 12)(i.e. chargeable persons under S.959B). Returns of income must be submitted by the return.... before the deadline". I have in the past seen the revenue issue a number of form 12's to people availing of rent a room relief.
 
Failing to file the necessary return does not mean a person isn't entitled to the relief.

As long as a person meets the requirements of the section their rent-a-room income is exempt.

Failing to file a return or filing a return which omits something that ought to be included simply exposes a person to the sanctions relating to failure to file. Such as, for example, no 4-year time limit applying in their case, as the 4 years starts from the end of the year in which they file a true and correct return...
 
"Under S.959B(1)(a) of the TCA 1997 FA2016 the income thresholds has been increased from €3,174 to €5,000. i.e. pre 2017 €3,174"

Does that mean that you are only allowed to earn up to €5,000 from the renting out of the room?
 
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