Renters in Ireland are set to receive a new tax credit worth €500 per year, following yesterday's €11bn Budget 2023 announcement.
It will apply to taxpayers who are paying rent on their “principal private residence” - it will not be available to those who receive other State housing supports such as the Housing Assistance Payment.
The €500 per year relief will come into effect for the years 2023 up to 2025, but Finance Minister Paschal Donohoe said it will be backdated so that it will apply in respect of rent paid in 2022.
READ MORE: Budget 2023 tax calculator: Find out exactly what tax and USC updates mean for you
This means that renters can apply for a double tax credit worth €1,000 at the end of this year.
Only one credit may be claimed per person per year, however it is proposed that the value of the credit will be doubled in the case of married couples and civil partners who are paying rent.
The Fine Gael Minister said: "For those taxpayers who are paying rent on their principal private residence, I am introducing a new rent tax credit valued at €500 per year. This measure, aimed at those who do not get any other housing supports, will apply for 2023 and subsequent tax years but I am providing that it may also be claimed in respect of rent paid in 2022."
It is estimated that 400,000 people will benefit from the tax credit.
How do I apply for the €500 tax credit?
Tenants must apply with Revenue to avail of the €500 tax benefit. When the tax credit is applied it will reduce the amount of tax you pay.
The tenant's landlord must be registered with the Rental Tenancy Board for it to be claimed.
However, the credit is bad news for unregistered landlords who will likely have their details sent to revenue by their tenants given the high value of the credit.
The RTB previously estimated there to be 15,000 such landlords who could be in line for hefty fines of up to €4,000.
READ NEXT:
- Budget 2023: Who may be eligible for incoming Halloween and Christmas social welfare bonuses
Major boost for parents as key primary school charge set to be dropped from September 2023
- Ireland's most dangerous road with 22 fatal crashes on it since 2017
- Mum of slain Tallaght kids says 'every day is getting harder'
Get breaking news to your inbox by signing up to our newsletter
