Homeowners flocked to rent-a-room scheme in lean years

More people are doing it but Revenue figures suggest average earnings have fallen

Taxpayers flocked to the rent-a-room scheme to avoid tax and boost their incomes as austerity hit and tax burdens rose, new figures from the Revenue Commissioners show.

According to the figures, the numbers availing of the scheme soared by 180 per cent between 2004 and 2015, as homeowners across the country sought to boost their income without increasing their tax liabilities.

The scheme allows people to earn up to €14,000 without paying any tax from renting out a room in their property. Prior to 2014 the limit stood at €10,000, but it was subsequently increased, to €12,000 in 2015 and €14,000 in 2017, as the Government sought to ease the housing crisis by incentivising homeowners to let a room in their properties.

In 2004 just 2,300 homeowners availed of the scheme – or disclosed to the Revenue that they were doing so – at a cost, in tax forgone, of some €2.7 million to the exchequer. However, as the impact of successive austerity budgets hit home, and taxpayers faced paying tax of as much as 55 per cent on their incomes, more decided to avail of the scheme. By 2012 users of the scheme had more than doubled, while by 2015, the most recent year figures are available for, the numbers had soared to 6,460.


Back in 2004, tax forgone per household amounted to €1,173. By 2015 this had shrunk to €1,068.

How many people avail of the rent a room tax relief?

Year €m in tax forgone # of cases

2004 2.7 2,300

2005 3.3 2,820

2006 3.9 3,560

2007 4.7 3,180

2008 5.6 3,600

2009 5.6 3,770

2010 5.3 3,770

2011 5.6 3,920

2012 8 5,250

2013 8.3 5,730

2014 9.3 5,710

2015 6.9 6,460

Source: Revenue Commissioners

Fiona Reddan

Fiona Reddan

Fiona Reddan is a writer specialising in personal finance and is the Home & Design Editor of The Irish Times