Rent-a-Room Scheme Ireland: Complete Guide for 2026

The Rent-a-Room Scheme is one of the most generous tax reliefs in Ireland. If you rent out a room (or rooms) in your own home, you can earn up to €14,000 per year completely tax-free. Here is everything you need to know.

What Is the Rent-a-Room Scheme?

The Rent-a-Room (RAR) scheme allows homeowners and tenants (with permission) to rent out rooms in their principal private residence and earn rental income free from income tax, PRSI, and USC — up to the annual threshold.

2026 threshold: €14,000 per year (unchanged since 2017)

This applies to the gross income received, including any payments for food, laundry, or other services.

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Who Qualifies?

The Property Must Be Your Principal Private Residence

You must be living in the property as your main home during the letting period. You cannot:

• Rent out your entire home and move out
• Apply the scheme to an investment property
• Use it for a property that is your second home or holiday home

The Room Must Be in Your Home

The room must be part of the same dwelling — typically your house or apartment. You can rent:

• A spare bedroom
• A converted garage or loft that is attached to and accessed through your home
• Multiple rooms simultaneously (combined income still must stay under €14,000)

You cannot use the scheme for:

• A self-contained flat or apartment accessed by a separate entrance
• A converted garden shed or detached outbuilding

Licence vs Tenancy

Most Rent-a-Room arrangements are licences, not tenancies. This means the Residential Tenancies Act does not apply — the tenant has fewer legal protections. Be clear with your licensee about the terms.

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The €14,000 Threshold — Key Rules

Scenario	Tax Position
Annual income ≤ €14,000	100% tax-free
Annual income > €14,000	Full amount taxed (not just the excess)
Annual income = €13,999	Tax-free
Annual income = €14,001	All €14,001 taxed

This is a cliff-edge relief. If your income goes even €1 over the threshold, the entire amount becomes taxable. Plan carefully.

What Counts as Income?

The gross amount received including:

• Rent
• Payments for meals, food, or utilities if bundled into the rent
• Laundry or cleaning charges
• Any other payments from the occupant in connection with the accommodation

What Does Not Count?

Separate payments for clearly separate services (e.g., you charge separately for cleaning common areas) may not be counted if they are genuinely separate — but Revenue scrutinises this closely.

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How to Claim the Relief

Self-Assessment Filers (Form 11)

1. Declare the Rent-a-Room income on your Form 11 under the Exempt Income section
2. Enter the amount received — Revenue will confirm it is under the threshold
3. No further calculation needed if income is under €14,000

PAYE Workers (myAccount)

1. Log into myAccount on Revenue’s website
2. Select “Review your tax” for the relevant year
3. Add rental income under the Rent-a-Room scheme category
4. Confirm the amount — if under threshold, no additional tax arises

What if You Go Over the Threshold?

If your income exceeds €14,000:

• The full amount is assessable under Case V (rental income rules)
• You can deduct allowable expenses (mortgage interest is not deductible under normal rental rules while using this scheme — but if you opt out, normal rental rules apply)
• Seek advice from a tax advisor on whether opting into or out of the scheme is better for your situation

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RTB Registration — Does It Apply?

No. The Rent-a-Room Scheme is exempt from the Residential Tenancies Act. You do not need to register with the RTB because the occupant is a licensee, not a tenant.

However, you should have a written licence agreement setting out:

• The weekly or monthly payment
• Notice periods (typically agreed between parties — no statutory minimum)
• House rules (guests, quiet hours, shared areas)
• Utility arrangements

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Social Welfare and HAP Considerations

Carer’s Allowance / Disability Allowance

Rent-a-Room income is assessed as means in some social welfare payments. Check with the Department of Social Protection if you receive a means-tested payment.

Home Carer’s Credit

The home carer’s credit is not affected by Rent-a-Room income if you meet the other conditions.

HAP Tenants

HAP cannot be used by a Rent-a-Room licensee — HAP is only for tenants with a formal tenancy agreement under the RTA.

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Practical Tips

Set rent just below the threshold If your going rate would bring you to €14,200/year, consider whether a small discount to stay under €14,000 makes financial sense — you’d save the tax on the entire €14,000.

Keep records Even though the income is exempt, Revenue may ask you to confirm the amount. Keep rent receipts or bank statements showing income received.

Short-term letting (Airbnb) The Rent-a-Room Scheme does not apply to short-term holiday lets on platforms like Airbnb where the property or room is let to tourists on a nightly or weekly basis. These require specific planning permission in certain areas and different tax treatment.

Digs (students) The scheme is popular with homeowners taking in students. Digs income qualifies fully under the scheme, including payments for meals.

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Rent-a-Room vs Renting Out Fully

Factor	Rent-a-Room	Full Rental
Tax-free threshold	Up to €14,000	None
Must live in property	Yes	No
RTB registration	No	Yes
Tenant protections	Minimal (licensee)	Full RTA rights
Mortgage interest deductible	No (if using scheme)	Yes
Can refuse tenants	Yes (more flexibility)	Equal Status Act applies

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Useful Tools

• Rent-a-Room Calculator — calculate if you’re under the threshold and estimate your tax saving
• Revenue Rent-a-Room Guidance
• Citizens Information — Renting a Room in Your Home

This guide is for informational purposes only. Tax rules can change — consult a qualified accountant or tax advisor for advice specific to your circumstances.