irish·finances

Guide

Rent-a-Room relief

Up to €14,000/year tax-free if you let furnished rooms in your own home. Easy to use, easy to lose — there's a hard cliff at the limit.

The basics

  • Limit: €14,000 per year, gross (before any deductions).
  • Tax-free below the limit — no income tax, USC, or PRSI.
  • Cliff edge: earn €14,001 and the entire amount becomes taxable. There's no taper.
  • Property must be your sole or main residence for some part of the year.
  • Includes any extras: meals, laundry, utilities, parking — all count toward the €14,000.

Who qualifies

  • You own (or rent — yes, tenants can sub-let too) the home.
  • You live there as your primary residence.
  • The room is rented to a person who uses it as their main residence (not Airbnb-style nightly stays — see below).
  • Tenant is not your child or close family member.

What about short-stay platforms (Airbnb, Booking.com)?

This is the most common mistake. Income from one-night or short-stay guests does not qualify for Rent-a-Room. Revenue treats it as trading income (Case I) or rental income (Case V), taxable at your marginal rate plus USC and PRSI.

The relief is for residential lettings — students, lodgers, or digs arrangements where the room is the lodger's main address.

The cliff edge — why €13,999 is fine, €14,001 is a disaster

Most reliefs taper. Rent-a-Room doesn't. If your gross receipts are €1 over the limit, you lose the entire relief and the full amount becomes taxable.

On €14,500 of receipts you'd pay tax on €14,500 — about €7,250 at higher-rate marginal tax. On €13,999 of receipts you pay nothing. The cliff is €1 = €7,000+ in tax.

If you're rising toward the limit, count everything the lodger pays — including utility shares — and stop before €14,000.

How to claim

You don't need permission, but you do need to declare:

  1. Sign in to Revenue myAccount
  2. PAYE Services → Manage your tax for the current year (or a prior year)
  3. Go to Tax credits & reliefs → You and your family → Rent-a-Room relief
  4. Enter the gross amount received during the year
  5. Submit. If you're under the €14,000, no tax is due. Above it, the system computes tax on the full amount.

Source: Revenue: Rent-a-Room relief

Other considerations

  • Mortgage interest: lodger income doesn't affect your principal-residence status; you keep your normal mortgage interest treatment.
  • CGT principal-residence relief: still fully available — Rent-a-Room income doesn't taint your home for CGT purposes when you sell.
  • Insurance: tell your home insurer. Many policies require disclosure when you take in lodgers, even within Rent-a-Room.
  • Mortgage clauses: some mortgages prohibit letting without permission. Check the small print.
  • RTB registration NOT required: Rent-a-Room arrangements are not standard tenancies under the RTA, so no Residential Tenancies Board registration. The lodger has fewer rights than a tenant — both sides should understand this.

Strategy: pricing to stay under

€14,000 ÷ 12 = €1,167/month. In Dublin that's slightly below typical single-room rates (~€1,100–€1,400). Many landlords undershoot deliberately to stay safely under. A common play:

  • One room at €1,000/mo = €12,000/yr (€2,000 buffer for utilities)
  • Two rooms at €600/mo each = €14,400/yr → over the cliff. Drop to €575 = €13,800.
  • Add €50/mo for utilities to the rent → counts toward the cap.

Next