Property Clinic: I'm a PAYE worker and have no idea how the tax system works
I’m sharing an apartment in Galway. My mother asked me the other day if I was claiming €500 rent relief and got really annoyed when she saw I had no idea what she was talking about. I’m a PAYE worker and have no idea how the tax system works. Can you explain to me how I go about claiming this money please. How long does it take?
The rent tax credit is calculated as 20% of the rent paid in the year and is capped at €500 for a single person or €1,000 for a couple who are jointly assessed to tax. The credit will be available for the tax years 2022 to 2025. Claims for the 2022 tax year must be made by completing a Form 12 tax return using PAYE Services in myAccount or a Form 11 tax return in the case of a self-assessed tax payers. The claim must relate to rental payments which both fell due, and were actually paid, during the specific tax year. Once claimants have signed into myAccount, they should: 1) click on ‘Review your Tax’, 2) enter the relevant tax year (this will be 2022), 3) click on ‘request’, 4) scroll down to ‘complete your Income Tax Return’, 5) click on ‘Tax Credits and Reliefs’, 6) Select ‘You and Your Family’ and then select ‘Rent Tax Credit’, and 7) work through the claim process, answering each question asked about the tenancy.
Taxpayers who are taxed through the PAYE system can make real time claims for rent payments made in 2023, using Revenue’s Real-Time Credit facility. This facility can be accessed through myAccount, under the ‘PAYE Services’ and ‘Manage My Record’ Tax. A step-by-step guide to making and checking the progress of a claim using the Real-Time Credit facility is available on the Revenue website. Once claimants have accessed the Real-Time Credit facility, they should locate the rent tax credit screen and follow the process on screen to claim the credit. This process will be very similar to that outlined for 2022.
Various information will be required by the Revenue Commissioners to support the claim made for each tax year. A key requirement is the unique registration number for the tenancy issued by the RTB. When a tenancy is registered with the RTB, the landlord and each tenant named on the registration will have received a confirmation letter from the RTB which contains the unique registration number for the tenancy. Landlords should be able to provide tenants with the RTB registration number from their copy of the confirmation letter. Claimants are not required to send the rental agreement, or a statement of rent paid to Revenue. However Revenue may ask for such supporting documentation at a later stage and claimants should therefore retain copies of these documents.
It is important to check that the rent relief does apply. We have set out below additional information to determine if the tenancy qualifies for the rent relief.
The relief is available where rent is paid under a lease that must be registered with the Residential Tenancy Board (RTB) and has been so registered. The rent relief also applies where there is a licence for the use of a room, or rooms, in another person’s home. rent-a-room or digs arrangements, that are generally not required to be registered with the RTB. In all cases, the property must be a residential property located in Ireland and not abroad.
The claimant must not be a ‘supported tenant’. This means that the claimant cannot be in receipt of State housing support such as the Housing Assistance Payment (HAP), Rent Supplement or Rental Accommodation Schemes (RAS). This is the case even if the claimant is required to make a ‘top-up’ payment under the scheme.. Where the claimant and landlord are parent and child or vice versa, the rent tax credit will not be available. Where the claimant and the landlord are otherwise related, the credit may still be available but not where the lease is exempt from RTB registration, such as a ‘rent-a-room’ or ‘digs’ type arrangement.
The rent relief can be claimed by a parent who pays rent for property used by a child for the specific purpose attendance at or participation in an approved college course. The property must be the child’s principal private residence during term time. The tenancy must be registered with the RTB and so rent-a-room or digs type arrangement will not qualify for relief. In addition the credit is only available where neither the claimant nor the tenant are related to the landlord. Also the child must have been under 23 at the start of the tax year in which he or she first commenced an approved course in order for the rent tax credit to apply.