This year a lot of tax incentives have been released, the main focus of these incentives is to reduce landlord attrition. But there have been a fair few incentives released for tenants as well.
One of the incentives for tenants is a 500e tax rebate, in this article, we will explore how to ensure your tenants are able to claim and more importantly that as a landlord you are registered correctly so as to avoid any penalties.
Rent Tax Credit
On December 15, 2022, Rent Tax Credit was launched. If you are a taxpayer who pays rent in Ireland the credit can decrease your income tax by the same amount as the credit.
To claim this credit for your 2022 rent payments, you must file an income tax return for that year. As a PAYE taxpayer, you can also claim the credit now for payments made in 2023.
The Rent Tax Credit will be available from 2022 to 2025.
How much is the tax credit?
The Rent Tax Credit is equal to 20% of your annual rent payments, capped at:
€500 for individuals
€1,000 for couples who are jointly evaluated for tax purposes
In the event that multiple tenants occupy a single property and pay individually rent, each individual or couple can claim the Rent Tax Credit for their own rental payments.
*Please note that payments for security deposits, repairs, maintenance, board, laundry, utilities, or other services are not eligible for this credit.
What are the requirements from a landlord’s perspective?
In order for tenants to be eligible to claim the tax incentive they must not be;
- A housing association or approved housing body (AHB)
- A local authority
- Your parent
- Your child
The landlord must also be registered with the RTB.
As a landlord why do you need to know this?
It’s important to understand that s a tenant may opt to apply for the scheme without a prior discussion with their landlord.
If a tenant makes an application which is declined because the property is not registered with the RTB could have serious consequences for the landlord.
What are the penalties for not registering with the RTB?
The maximum sentence for a landlord who fails to comply with RTB registration laws is €4000 and/or 6 months imprisonment.
In addition to the fines imposed by the courts, the landlord may be subject to pay RTB legal costs which are often in excess of €2500+.
Landlords have one month from the commencement of the tenancy to register with the RTB.
To search previous Court outcomes for unregistered tenancies click here.
Property Managers Ireland
For almost 25 years KPM Group has been delivering the highest standards in Property Management.
We act for private investors, lenders, as well as domestic and international funds. Sectors of expertise include Private Rental, build-to-rent projects, owner management companies, Local Government agencies and best-in-class Social Housing developments.
We are property management professionals for domestic and international fund investors, the financial services sector, Local Government agencies and the Owner Management Company sector, in which we started and where today we still continue to grow.
If you would like more information on how to register with the RTB or a considering moving to a property management expert, the team at KPM can help. Contact us today for more information.
