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Rent Tax Credit 2022

The introduction of a new Rent Tax Credit was announced by the Minister for Finance recently in Budget 2023. The tax credit is available for the tax years 2022 to 2025 inclusive.

How much is the Rent Tax Credit?

The amount of the credit is 20% of your rent payments in the year, up to a maximum credit of:

· €500 for an individual
· €1,000 for a couple who are jointly assessed for tax

When Can I Apply for the Rent Tax Credit?

Applications for this new tax credit for the 2022 tax year have been open since January 2023. You can apply for the tax credit on your income tax return.

Rent Tax Credit Eligibility Criteria:

The tax credit may be available where you pay rent for:

· Your principal private residence
· Another property you use to facilitate your attendance at work or on an approved course
· and
· A property used by your child to facilitate their attendance on an approved course.

The conditions which apply relate to the:

· Location and use of the rental property
· Type of tenancy
· Relationship between you, or your child and the landlor
· and
· Age of your child and the type of course they are attending.

The tax credit does not apply to payments for:

· A security deposit
· Repairs or maintenance
· Board, laundry, or other services

Your landlord must not be:

· A housing association or approved housing body
· A local authority
· Your parent
· Your child
· For a property that is used by your child to attend a course, the landlord cannot be any relation to you or your child.

You cannot claim the credit if you are getting housing support including:

· The Housing Assistance Payment
· Rent Supplement
· The Rental Accommodation Scheme
· Cost rental housing

Tenancy Registration

Unless it is a license agreement, your tenancy must be registered with the Residential Tenancy Board. This covers situations when you are renting a room or place and sharing it with the owner.

Please read the Rent Tax Credit guidance for further information on the necessary conditions to be eligible.

How is the rent tax credit calculated?

Example: Calculation of the Rent Tax Credit

On June 1, 2022, Elizabeth moves into a rental and begins making monthly rent payments of €700. When Elizabeth initially moved in, she also paid a €700 security deposit in addition to her rent.

Elizabeth will make payments totaling €4,900 (€700 * 7) for the tax credit during the 2022 tax year. Please note, the security deposit is not considered within the calculations for the Rent Tax Credit.

As Elizabeth makes qualifying payments in excess of €2,500, she is eligible for the maximum relief of €500 in 2022.

How to claim the Rent Tax Credit for 2022?

To receive this credit, you must submit a claim.

How to claim if you are a PAYE taxpayer

You can claim the credit for 2022 by completing your Income Tax Return in myAccount.

Simply follow the steps below:

· Sign into myAccount
· Click on ‘Review your Tax’
· Enter the relevant tax year (2022)
· Request a ‘Statement of Liability’
· Click on ‘Complete your Income Tax Return’
· In the ‘Tax Credits & Reliefs’ page select ‘You and your family’ and click on ‘Rent Tax Credit’
· Complete the claim process
· Submit the Income Tax Return

How to claim if you are self-assessed

You will be able to claim the credit for 2022 by completing your annual Income Tax Return (Form 11) in Revenue Online Service (ROS).

Follow the steps below to claim the credit:

· Sign into ROS
· Open ‘My Services’
· Click ‘File Return’
· Select ‘Income Tax’
· Select the tax year for which your wish to file a return (2022)
· Identify the ‘Rent Tax Credit’ section of the tax return and enter the necessary information

At Cronin & Co Accountancy Firm, we specialise in taxation services. For more information about how you can apply for the tax credit, please contact with a member of our tax team.