Tax Free Incentive For Renting to Students

student accommodationIrish homeowners who rent a spare room to students can earn up to €12,000 tax free. Under Irish law, homeowner’s don’t have to pay tax on rental income from digs unless passing the cap of €12,000 in any tax year. The incentive has the potential to make a difference in the recent accommodation shortages which have plagued students trying to find housing in the capital and other high population areas.

This tax relief comes under the rent-a-room scheme and was introduced with the aim of increasing the availability of rented residential accommodation for students. Research has shown that more and more students are deferring college because they can’t find a place to rent.

What are the facts on the tax relief for digs?

Homeowners cannot avail of tax relief for digs on private rental accommodation, only in the place of primary residence. There is no tax relief for digs on short term leases. For instance, renting the room out to a student over the course of a college year is covered but taking different people in every weekend is not.

Homeowners are exempt from paying tax on any rental income for digs unless passing the cap of €12,000 in any one tax year.

Rent-a-room relief will not affect mortgage interest relief or any exemption from Capital Gains Tax (CGT) if selling the home.

For students who may not consider digs as suitable accommodation it does have it’s benefits as highlighted by Cian Casey below..

“For the last three years I have been living in digs. For me digs was a great experience. For a student who was in and out of rented housing for two years previous it was a nice change. The reason I changed to digs was because no other type of landlords in Dublin were offering a college-year lease (c.9 months). I kept having to take a year-long lease. Until I discovered digs. The family I was living with were familiar with the student timetable so it worked out cheaper than rented accommodation. Simple things like having a conversation at the dinner table about the football matches at the weekend also added to it. As I go into my fourth year in digs, I feel happy recommending this kind of housing and hope that more people consider opening up their homes to students.”

To find out more information on Rent-A-Room Relief check out

To add a room on click here – is an introductory service, matching students who need homes with people who need lodgers.

To list a room on click here.

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