Reduce your tax and claim the new rent tax credit now

Over the last decade, the Irish public has been witnessing the destabilisation of the Irish private rental sector, having a shortage of accommodation available and record-breaking rental costs. With a 12.6% rent cost increase recorded between 2021 and 2022 alone, it was clear that the government needed to implement measures to assist in tackling the Irish housing crisis.

Thankfully, Budget 2023 brought some welcome relief with the introduction of the Rent Tax Credit.

For any of our contractor community, here’s our breakdown of the rent tax credit, what you can potentially claim and how to do so.

What is the rent tax credit?

Introduced from the 15th of Decmber 2022, the rent tax credit is applicable to individuals who pay for private rented accomodation. It is applicable to income tax paid, and will reduce the income tax due by the value of the credit received.

The amount of the credit is 20% of your rent payments in the year, up to a maximum credit of:

• €500 for an individual
• €1,000 for a couple classed as jointly assessed

To claim the full rent credit, a single person must spend at least €2,500 a year on their rent and couples must spend at least €5,000.

What does the rent tax credit not cover?

The rent tax credit can not cover the cost of a security deposit, repairs or maintenance associated with the accommodation or other services such as laundry requirements.

Who is applicable to receive it?

The credit is available to three groups outlined:

1 - A tenant that makes a qualifying payment for a  principal private residence

2 -  A claimant which makes a qualifying payment in respect of a ‘second home’; property used to facilitate  which he or she uses to facilitate employment, office holding, trade, profession or an approved course.

3 - A claimant making a qualifying payment in respect of a property used by his or her child to facilitate the latter’s attendance at, or participation in, an approved course

What dates can I claim for?

The credit will be available for 2022 until 2025. You can claim the tax credit for rent paid in 2022 by making a tax return for 2022. You can claim the tax credit during the year for other years.

How do I claim it?

The process is extremely simple! All you have to do is

1. Log on through your MyAccount
2. Click “Manage Your Tax 2023”
3. Then click “Add New Tax Credit”
4. Select “You and Your Family”
5. From there you will see the rent tax credit. Please select and enter the relevant (you will need to have your PPS number and RTB Registered number)

Have any further questions?

Looking to see if you are applicable to claim the rent tax credit or have any further questions? Feel free to reach out to your dedicated account manager for assistance on 01-8077106 or info@iconaccounting.ie.