Housing tax credits and reliefs

Introduction

You can claim tax relief on certain housing expenses.

There is also a 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 2018 for homeowners and between 15 October 2014 and 31 December 2018 for landlords.

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 mortgages used 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.

The amount of interest you can deduct on these mortgages has increased in recent years:

  • Prior to 2017, it was 75% of the interest
  • In 2017, it was 80% of the interest
  • In 2018, it was 85% of the interest
  • From January 2019, it will be 100% of the interest (as announced in Budget 2019)

Interest is treated as accruing on a daily basis and the date the loan was taken out is not relevant.

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.

Mortgage interest relief was due to be abolished entirely after 31 December 2017. Following Budget 2018, it has been extended to 2020 on a tapered basis for people who were eligible in 2017 (in general, people who took out a qualifying mortgage loan between 2004 and 2012). It will cease entirely from January 2021.

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 €14,000 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.

Tax when providing short-term guest accommodation

If you have income from providing accommodation to occasional visitors for short periods, for example through an online accommodation booking site, this income is not considered to be rental income. This is because the visitors use the accommodation as guests rather than tenants. Revenue have published a guidance manual on how such income is treated for tax purposes (pdf).

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.

Contact information for Revenue regional offices is available on the Revenue website. Remember to have your PPS number to hand in any dealings with Revenue.

Page edited: 11 October 2018