Revenue Note for Guidance

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Revenue Note for Guidance

473 Allowance for rent paid by certain tenants

Summary

This section provides an allowance at the standard rate for persons who prove for a year of assessment that they have paid rent in respect of certain private tenancies which is their main residence. The relief takes the form of a reduction in income tax chargeable on an individual’s income by an amount equal to the lowest of—

  • the total of such payments multiplied by the standard rate of tax for that year;
  • the specified limit (see below) multiplied by the standard rate of tax for that year;
  • the amount that reduces the income tax of that person to nil (that is, it cannot create a repayment).

Details

Definitions

(1)appropriate percentage” means a percentage equal to the standard rate of tax.

specified limit” is the maximum amount of the allowance provided by the section and to which the standard rate of tax is applied i.e. for year ended 31 December 2010-

  1. married, civil partners, widowed persons and surviving civil partners – €4,000; but if over 55 years €8,000;
  2. single persons – €2,000; but if over 55 years €4,000.

The table below sets out the amount of relief due at the standard rate of tax for years 2010 to 2018:

Tax Year

Single Under 55

Single Over 55

Widowed/Surviving civil partner/Married/Civil partners under 55

Widowed/Surviving civil partner/Married/Civil partners over 55

2010

2,000

4,000

4,000

8,000

2011

1,600

3,200

3,200

6,400

2012

1,200

2,400

2,400

4,800

2013

1,000

2,000

2,000

4,000

2014

800

1,600

1,600

3,200

2015

600

1,200

1,200

2,400

2016

400

800

800

1,600

2017

200

400

400

800

2018

0

0

0

0

residential premises” is a property held under a tenancy agreement, being a building or part of a building used or suitable for use as a dwelling and land which the occupier has for his/her occupation and enjoyment with the building as its garden or grounds of an ornamental nature.

rent” covers every type of periodic payment made in return for the use, occupation or enjoyment of residential premises. However, rent does not include any payment —

  • for the maintenance or repair to residential premises for which in the absence of agreement to the contrary the tenant would be liable,
  • relating to the provision of goods or services,
  • relating to any right or benefit other than the bare right to use, occupy and enjoy the premises, or
  • any part of the rent that is recoverable by the tenant or is subsidised from or by other persons.

tenancy” includes any contract, agreement or licence in respect of which rent is paid, but does not include —

  • a tenancy for a freehold estate or interest, or a tenancy for a definite period of 50 years or more,
  • tenancies held from local authorities, Government Departments or the Office of Public Works, and
  • tenancies where the tenants have the option of buying the dwelling for a nominal amount after payment of rent for a specified period.

(1A)(a) No relief is due to individuals who commence renting on or after 8 December 2010.

(1A)(b) Relief will continue to be allowed for the years 2010 to 2017 to individuals who on 7 December 2010 were paying rent under a tenancy.

Relief

(2) & (3) The relief is available to an individual who proves for a year of assessment that in that year he/she has paid rent in respect of a residential premises which, during the period in respect of which the rent was paid, is his/her main residence. The relief takes the form of a reduction in his/her income tax liability (other than his/her liability for tax withheld from annual payments under section 16(2)). The reduction is an amount equal to the lowest of—

  • the total of such payments multiplied by the standard rate of tax for that year;
  • the specified limit multiplied by the standard rate of tax for that year;
  • the amount that reduces the income tax of that person to nil (that is, the relief cannot create a repayment).

The reference to section 16(2) ensures that tax deducted from annual payments is retained in charge against the person deducting the tax and that tax is not diluted by the reduction in tax in respect of this relief.

In the case of married couples or civil partners jointly assessed to tax under section 1017 or 1031C, the relief is available irrespective of who pays the rent.

Apportionment

(4) Any payment made partly for rent and partly for some other purpose is to be apportioned in order to determine the amount paid on account of rent. Any such apportionment may be made by an inspector to the best of his/her knowledge and judgment.

Payments

(5) Payments in respect of rent for any period are treated as made in that period irrespective of when they are actually made. For example, if rent payments are made after the end of the year but are related to a period within that year, they are regarded as having been made within that year. Where the period in respect of which a rent payment is made straddles 2 years, the payment is to be apportioned on a time basis between each of the 2 years.

Information

(6) The relief must be claimed and must be supported by certain information. The information required is a signed certificate and statement by the claimant, in a form prescribed by the Revenue Commissioners, setting out —

  • the name, address and income tax number of the claimant,
  • the name, address and income tax number or corporation tax number, as appropriate, of the person or body of persons entitled to the rent under the tenancy under which the rent was paid,
  • the postal address of the premises in respect of which the rent was paid,
  • full particulars of the tenancy under which the rent was paid.

Also required is a receipt or acknowledgement in respect of such rent.

Failure to supply any of the required information may be grounds for the refusal of a claim for relief. However, an inspector may waive the requirement that the claimant supply the name, address and income tax number or corporation tax number, as appropriate, of the person or body of persons entitled to the rent under the tenancy under which the rent was paid on receipt of satisfactory proof that the claimant’s inability to supply the information is genuine. The inspector may also waive the requirement to supply a receipt or acknowledgement of rent paid on the submission by the tenant of details of the total rent paid for the relevant period and the name and address of the person or body of persons to whom the rent was paid.

Appeals

(7) A person aggrieved by a decision of an inspector in relation to any question arising under subsection (4) or (6) may appeal to the Appeal Commissioners. Notice of appeal must be made in writing to the inspector within 30 days of receipt of the inspector’s decision. The Appeal Commissioners are to hear and determine such an appeal in the same manner as if it was an appeal against an income tax assessment.

Landlord’s obligations

(8) A landlord is obliged within 7 days of being requested by the tenant to supply the tenant with a receipt of acknowledgement of the rent paid by the tenant in the year of assessment. The receipt or acknowledgement must be in writing and must contain —

  • the name and address of the tenant,
  • the name, address and income tax number or corporation tax number, as appropriate, of the person or body giving the receipt or acknowledgement, and
  • full particulars of the amount of rent paid in the year of assessment and the period within that year in respect of which it is paid.

Regulations

(9) The Revenue Commissioners may make regulations in connection with the operation of the relief. These Regulations are contained in the Income Tax (Rent Relief) Regulations, 1982 (S.I. No 318 of 1982).

Bar on double relief

(10) A tenant is not entitled to obtain relief under this section and under another provision of the Income Tax Acts in respect of the same payment of rent.

Relevant Date: Finance Act 2020