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Housing tax credits and reliefs

Introduction

You can claim tax relief on certain housing expenses.

There is also a new tax refund scheme, which is designed to help first-time buyers of newly built homes to assemble the required deposit. Read more in our document on the Help to Buy (HTB) incentive.

Home Renovation Incentive

The Home Renovation Incentive (HRI) provides an income tax credit to homeowners and landlords who carry out qualifying renovation and improvement works.In order to qualify for the HRI, the work must be done between 25 October 2013 and 31 December 2016 for homeowners and between 15 October 2014 and 31 December 2016 for landlords.

Budget 2017: this end date is being extended to 31 December 2018.

The HRI credit is payable over the 2 years following the year in which the work is carried out. It is calculated at a rate of 13.5% on all qualifying expenditure over €4,405 (before VAT) up to a maximum of €30,000 (before VAT). Qualifying works include extensions and renovations to the home, window-fitting, plumbing, tiling and plastering. Builders must be fully tax-compliant. All expenditure and relief claims must be registered electronically with the Revenue Commissioners.

Tax relief for tenants

If you live in private rented accommodation and pay income tax, you may be eligible for tax relief on part of your rent. More information is available in our document on tax issues for tenants. This scheme only applies to people who were renting on 7 December 2010.

Tax relief for landlords

You can deduct the interest on money borrowed to purchase, improve or repair rented residential property when working out your rental income for tax purposes.

You must show that you have registered all tenancies in the property with the Residential Tenancies Board (RTB). Interest can only be deducted during the period in which the property is let.

For residential properties, this deduction is restricted to 75% of the interest accruing on loans. Interest is treated as accruing on a daily basis and the date the loan was taken out is not relevant.

Budget 2017: this deduction is being increased to 80%.

Extra relief

Since January 2016, landlords who rent residential property for 3 years to tenants getting social housing supports (called qualifying tenants) can deduct all of the interest that accrues during that 3-year period. Social housing supports include the Housing Assistance Payment, the Rental Accommodation Scheme and Rent Supplement.

Landlords must submit an undertaking to the Residential Tenancies Board (RTB) stating that they commit to renting a residential property to qualifying tenants for 3 years. The RTB must register these undertakings in its Register of Tenancies. You can get the form for registering an undertaking on the RTB's website (pdf).

Tax relief on mortgage interest

Mortgage interest relief is a tax relief based on the amount of qualifying mortgage interest that you pay in a given tax year for your principal private residence (your home). A tax year means the period from 1 January to 31 December. Mortgages taken out after 31 December 2012 no longer qualify for mortgage interest relief.

Budget 2017: Mortgage interest relief was due to be abolished entirely after 31 December 2017. It will now be retained beyond this date, on a tapered basis. Details are to be announced in Budget 2018.

Rent-a-room relief

If you rent out a room or flat in your home you are exempt from income tax on the amount that your tenant pays you for rent and other services, up to €12,000 in a tax year. The relief applies only to residential tenancies, not to short-term guest arrangements. The relief can also apply to a self-contained unit (such as a basement flat) if it is part of, or is directly attached to, your home. You are not eligible for Rent-a-room relief if you are renting the room to a son or daughter.

Budget 2017: The ceiling for exemption from income tax under the Rent-a-room scheme is being increased from €12,000 to €14,000 for 2017 and subsequent years.

Tax when transferring ownership

When ownership of a property is transferred, the financial gains are usually liable to tax but some exemptions and reliefs apply.

For instance, when you sell a property, any profit you make over the amount that you paid for it would usually be liable for Capital Gains Tax. There is however an exemption if the property is the main residence where you live. See Revenue leaflet CGT2 (pdf) for an introduction to Capital Gains Tax or see the more detailed Guide to Capital Gains Tax (pdf).

If you receive property as a gift or inheritance, you may have to pay Capital Acquisitions Tax. A number of reliefs and exemptions apply including transfers between spouses or civil partners or the receipt of a house that has been your main residence.

Stamp duty

Stamp duty is a tax that may be payable when ownership of a property is transferred. The current rate is 1% for residential property valued up to €1 million and 2% on the balance. You can get further information on stamp duty on property.

Where to apply

You can claim tax credits online.

Lo-call telephone numbers for Revenue regional offices are available here. You can find more detailed contact details for your region here. Remember to have your PPS number to hand in any dealings with Revenue.

Page edited: 19 October 2016

Language

Gaeilge

Related Documents

  • Stamp duty on property
    Stamp duty is payable on the transfer of property.
  • Renting out a room in your home
    Rent-a-room relief makes it possible to earn tax-free rental income when you rent out a room in your home to private tenants.
  • Capital Gains Tax
    Capital Gains Tax is charged on the capital gain or profit made on the disposal of an asset. Some assets are exempt from Capital Gains Tax. Find out if you are liable for Capital Gains Tax.

Contact Us

If you have a question relating to this topic you can contact the Citizens Information Phone Service on 0761 07 4000. The Phone Service will operate Monday to Friday, 9am to 6pm during January 2017. You can also visit your local Citizens Information Centre.