Can I claim tax relief on my daughter’s rent as she is living this year in university residential halls in a five-person apartment? She has a single bedroom.
She was in university residential halls last year in a five-person apartment, and shared a double bedroom in order to get accommodation. If eligible for tax relief, can I also claim for last year?
If tax relief doesn’t apply, this seems very unfair as travelling by bus is a four-hour commute and getting accommodation for a student is a nightmare.
People were somewhat dismissive about the scale of the rent tax credit when it was first introduced, notably certain Opposition politicians. And it is fair to say that even the Government was fairly vocal about its intention to increase the benefit, and took the first step in doing so in the recent budget.
However, the queries that have come in from readers to this column and in the special Budget Q&A that we run after every budget speech show just how important the payment is to many families, already stretched in paying for rents that remain close to record highs.
That’s especially the case for families from outside the big cities trying to fund rent for their college-age children.
And it certainly was not helped by a somewhat confused launch – at least in respect of student accommodation.
When initially announced in last year’s budget, the measure was designed as a straightforward credit against income tax for people paying rent.
That was fine for most people. And certainly it is true that many students doing summer work and holding part-time jobs could have some income tax against which to offset the credit, as on-campus accommodation was included from the outset.
But for a lot of people, whose parents pay their college accommodation fees – in on-campus accommodation or otherwise – it would have excluded them from the measure and done nothing for the parents who, along with everyone else, were battling cost-of-living pressures.
The Minister came under immediate pressure on the subject and a quick amendment was introduced to make it clear that whomever was paying the rent of students in accommodation approved by the Residential Tenancies Board – including on-campus accommodation – would be eligible to claim the credit if they were paying income tax.
Some people were still excluded: those paying for third-level students staying in digs or under rent-a-room arrangements where a homeowner rents out one or more rooms to tenants for a maximum annual rental income of €14,000 – which is then tax-free to them. However, the measure was extended again in last month’s budget to include them and to allow them to claim back even for last year.
The key issue here is that rent is paid for a type of accommodation that meets the criteria.
That is certainly the case for you in relation to your daughter this year. Last year, she seem to have bunked in to an already full on-campus unit. However, if you were paying rent for this arrangement, as I assume you were, then you should be eligible for that too.
How do you claim it? Well that involves making a tax return – in the same way as you need to do if you are claiming for medical costs that have not otherwise been covered by private insurance, drug payment cards, medical cards or whatever.
If you are a PAYE employee, you sign into your myAccount on Revenue.ie. In relation to claiming for 2022, when you’re in, you click on “Review your tax 2019-2022″ in the PAYE Services section, request a statement of liability for the year and then click on “Complete your income tax return”.
As you work through that, you’ll find a page for tax credits and reliefs. You click on the “You and your family” heading and then click on “rent tax credit”. Submit the claim.
As a PAYE worker, you don’t have to wait until the end of the year to claim – although that option is open to you. You can claim it during the year by again going through myAccount but this time clicking on “Manage your tax 2023″.
You then click on “Add new credits” and the “You and your family” section to claim the rent tax credit.
If you are self-employed, you will need to claim as part of your annual Form 11 return through ROS.
How much will you get?
It was €500 last year, unless you were jointly assessed, in which case it could have been €1,000, and the figure is the same for this year.
That will rise to €750 and €1,500 in 2024 and 2025 – the last two years for which the credit will currently be available – assuming you or your daughter has a rent bill that qualifies in those years.
Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2, or by email to email@example.com. This column is a reader service and is not intended to replace professional advice