Where a room or rooms in an individual’s principal private residence (PPR) are let as residential accommodation and the gross annual rental income is less than €14,000 per annum, this rental income is exempt from Income Tax, PRSI and USC.
Revenue has confirmed their view that income from short term lettings, such as through Airbnb bookings, does not fall within Rent a Room Relief. In fact Revenue advise that income from short term lettings is not rental income but trading or miscellaneous income.
Qualifying room rentals must be used by the occupant for more than 28 consecutive days unless used for respite care, exchange students or occupants in full/part time education. A claim for Rent a Room will not affect mortgage interest relief or PPR relief from Capital Gains Tax.
An individual cannot avail of rent a room relief in respect of payments for accommodation in the family home by a child of the individual. There is no restriction where rent is paid by other family members such as nephews or nieces. Rent a room relief does not apply to payments received either directly or indirectly by an individual, or a person connected with the individual, in respect of accommodation provided in the family home where that individual is an office holder or employee of the person making the payment or of a person connected with the payer. This is an anti-avoidance measure and prevents relief where, for example, an individual receives payment from an employer in respect of accommodation provided by the individual in his/her PPR, for persons visiting the employer on work related or training trips.
Short term lettings are an area of particular interest to Revenue at present. If you think you may have a tax issue arising from such lettings talk to us today.