Another area which remained untouched in the budget was the Rent A Room Scheme!

Home owners are entitled to rent a room (or rooms) in their own private home.  A gross annual rental income of up to €10,000 can be received for the room (or rooms) completely TAX FREE!!

This may help home owners who are feeling the pinch at the moment to now have an additional income stream to assist in paying the bills.

 Thankfully, the Rent-a-Room Scheme does not affect an individual’s entitlement to mortgage interest relief on their private residence.

Relief is given in respect of a ‘qualifying residence’. When income arises for two or more people from one qualifying residence, the annual limit is divided by the number of people involved. Therefore, a couple renting out a room in their first house cannot receive income of €10,000 each without incurring any income tax liability. As the income arises from the one property, only one limit of €10,000 will apply, divided between the two individuals.

Effect of rental income on social welfare payments
Note, if you are receiving a means-tested social assistance payment from the Department of Social and Family Affairs, any rental income you get will be assessed as means and may affect your payment.

Applying
Although you will not have to pay tax on the rental income you must declare the Rent a Room income with the revenue at the end of the year.  For Further information, see: http://www.revenue.ie/en/tax/it/leaflets/it70.html#section9