There has much press coverage of Revenue investigating tax affairs of homeowners, in particular, those letting rooms through the Airbnb website, as previously highlighted by us here.
A press release issued by Revenue on 18th September (read it here) has now directly referenced the recipients of Airbnb income. They state they are writing to 12,000 people, as a reminder to include this income in the yearly tax return.
In reference to this, we highlight the main areas you need to be aware of when receiving rental income –
If you receive rental income from renting out a property
If you are renting out a property and your profits exceed €5,000 per year, you will need to register for Income Tax. Each year you will need to file your Income Tax Return by 31st October through a Form 11.
If this rental income is less than €5,000 per year, then you are not required to register for Income Tax but you are still liable to be taxed on this income. You will need to file this yearly through a Form 12.
If you are renting out a room in your home (long term)
If you are renting out a room for a long period of time and your income exceeds €14,000, you will need to register for Income Tax. Each year you will need to file your Income Tax Return by 31st October through a Form 11.
If your rental income is less than €14,000, you may be eligible to apply for rent-a-room relief.
Rent-a-room Relief
This allows a homeowner to earn rental income tax free, you much meet the following criteria to apply;
- Rental income does not exceed €14,000 in the tax year
- The property must be in Ireland
- The property must be your sole residence during the tax year
- This relief only applies to residential and not to short term or temporary lettings i.e Airbnb
If you are renting out a room in your home (temporary/short term)
If you are renting out a room in your home or the entire property temporarily (i.e Airbnb) you are not eligible to apply for rent-a-room relief.
If this rental income is less than €5,000 per year, then you are not required to register for Income Tax but you are still liable to be taxed on this income. You will need to file this yearly though a Form 12.
Airbnb Rental Income
If you are in receipt of rental income through the Airbnb website, your rental income will be subject to 20% or 40% depending on your circumstances. This income has been split by Revenue;
Trading Income
- Rental income exceeds €5,000 in that year or
- You rent a room or property on 6 or more occasions per year or
- Host for 30 or more nights in that year or
- The property is available for renting all of the time
- You will need to register for Income Tax. Each year you will need to file your Income Tax Return by 31st October through a Form 11.
Other Income
- Rental income does not exceed €5,000 in that year
- You are not required to register for Income Tax but you are still liable to be taxed on this income. You will need to file this yearly through a Form 12.
Renting to family members
Read our recent blog post on this here
Remember, you can offset a number of rental expenses which must be included in your rental return and keep a record of all invoices and receipts of expenses incurred. These include;
- Mortgage Interest (80% for 2017, 85% for 2018)
- Bank Charges
- Letting Expenses
- Insurance & Mortgage Protection premiums
- RTB Registration Fee
- Accountants Fees
- Utilities
- Advertising Expenses
- Repairs & Maintenance
- Wear & Tear
Why not also read our Pre-Letting Expenses blog here
Should you have any queries on this issue, please contact us on 01 5397999 or request our rental income form and application here