The rent a room scheme, which Revenue calls Rent-a-Room Relief, lets you take up to €14,000 a year from a room in the home you live in without paying Income Tax, USC or PRSI on it. Budget 2027 (6 October 2026) raises the ceiling to €16,000 from 1 January 2027, subject to the Finance Bill. One catch: go even €1 over the limit and the whole amount is taxed, not the excess.
Who qualifies for rent a room relief?
The room must be in your sole or main residence in Ireland: the home you live in for most of the year, where people would expect to find you. You do not have to own it: a tenant can sub-let a room, with the landlord’s permission. Only individuals can claim, not companies, and a jointly assessed couple shares one relief (Revenue).
A self-contained unit counts if it is attached to the house: a basement flat or a converted garage joined to the main building. A unit that stands apart does not. In Revenue’s example a converted attic qualified and a detached garage did not. Budget 2027 adds an exception for certain garden, auxiliary or modular dwellings installed after 27 July 2026 under the 2026 planning exemption (S.I. 340 of 2026), again subject to the Finance Bill.
The letting has to be long term. Since 1 January 2019 the relief does not apply to stays of 28 consecutive days or less, so bed and breakfast, guesthouse rooms and online booking sites are out. Three exceptions still qualify: respite care, full or part time students including language students, and four-day-a-week digs. Rent from your own child or your civil partner’s child is excluded, and so is money from your employer for clients using the room.
Letting a flat or the whole house instead of a room?
€14,000 a year is about €1,166 a month. Anything self-contained or let as a tenancy sits outside the scheme and under the RTB rent rules. The Letting Price Report prices that home from the RTB register, with three comparable RT numbers and the Notice of Rent Setting filled in, €14.99.
How is the €14,000 counted?
Gross, before expenses, and it includes everything the lodger pays you: rent, meals, laundry, a share of the bills. Revenue’s example is Mary, who took €13,000 in rent and €1,500 for meals in 2024. Her €14,500 passed the limit, so she had no relief and the full €14,500 was taxed, less allowable expenses (Revenue, conditions). Under the limit you pay nothing, but you also cannot deduct a cent of expenses. If more than one person is entitled to the rent, the limit is divided between you.
If expenses and wear and tear allowances would do more for you in a given year, you can opt out: tell Revenue through MyEnquiries or in writing on or before the return filing date, and the income is taxed as ordinary rent instead.
What can I charge for a room?
The RTB Rent Register and the RTB Rent Index cover tenancies, and a room in the owner’s home is not one, so there is no official average for a room. The nearest official yardstick is the one-bed figure for your town: the average rent of new one-bed tenancies registered with the RTB in Q4 2025 was €1,741 in Co. Dublin, €1,235 in Cork City, €1,215 in Galway City, €1,289 in Limerick City and €908 in Waterford City. A room with a shared kitchen and bathroom lets for less, and every page under rent prices by town and county shows the one-bed and apartment figures for where you live. Against the ceiling, about €1,166 a month for 2026 and €1,333 a month from 2027, that tells you whether one lodger at the local rate fits inside the scheme.
Is my lodger a tenant? Do I register with the RTB?
If the room is part of your home and not self-contained, the person renting it is a licensee, not a tenant. Landlord and tenant law does not apply: no RTB registration, no minimum standards inspection, and the lodger is entitled to reasonable notice if you end the arrangement. Disputes go to the Small Claims Procedure (Citizens Information). Put the ground rules in writing before anyone moves in: how long, how much notice, the rent and how it is paid, bills, visitors. Both sign, both keep a copy.
A self-contained flat is a tenancy. You register it with the RTB within a month and every year after (fee, deadline and fines), it must meet the minimum standards, and the landlord rules on rent setting and notices apply. One easing: if the flat was originally part of the main house, you can opt out of the tenant’s right to stay under section 25 of the Residential Tenancies Act, by written notice before the tenancy starts.
How do I claim rent a room relief?
You must declare the income even though it is exempt. PAYE taxpayers enter it on the Income Tax Return (Form 12) in myAccount: PAYE Services, Review your tax for the previous 4 years, request a Statement of Liability for the year, then under Tax credits and reliefs choose You and your family, Rent-a-Room Relief, and enter the gross rental income. Self-assessed taxpayers use the Form 11 in ROS (Revenue, how to claim). There is a four-year time limit, so relief for 2022 must be claimed by 31 December 2026; that matters if you paid tax on room income that should have been exempt.
You enter one gross figure, so keep the written agreement and a note of what was paid each month. If the room goes to a student for the academic year and to short-stay guests in the summer, Citizens Information says the two incomes are reported separately: only the first qualifies.
What else does the scheme touch?
Claiming the relief has no effect on Mortgage Interest Relief or on the Capital Gains Tax exemption for your main home when you sell. The Accommodation Recognition Payment for hosting people from Ukraine (€400 a month since 1 September 2026, due to end 31 March 2027) is separate, and Citizens Information says you can qualify for both. On the lodger’s side, rent paid under a rent-a-room licence counts for the Rent Tax Credit, with no RTB number needed. Up to €14,000 a year of room income is also left out of the means test for a medical card and, until 2027, for means-tested social welfare payments.