Home owners are entitled to rent a room in their home. Gross annual rental income of up to €10,000 is exempt from tax where a room (or rooms) in a persons principal private residence is let as residential accommodation. The Rent-a-Room Scheme does not affect an individual's entitlement to mortgage interest relief or capital gains tax exemption for a principal private residence. The exemption limit on the rent a room scheme was increased from €7,620 to €10,000 in Budget 2008.
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. 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.
Further information is available from your local tax office or the Revenue website, www.revenue.ie
