Quick answer: If you rent a room in your own home, you can earn up to €14,000 per year completely tax-free — no income tax, no USC, and no PRSI. The property must be your principal private residence (PPR), and the tenant must stay for at least 28 consecutive days. Unlike buy-to-let rental income, this relief does not affect your CGT exemption when you sell.
What is Rent-a-Room Relief?
Rent-a-Room Relief is a tax exemption that lets homeowners supplement their income by renting space in their home — a spare bedroom, basement, or converted space — without paying any tax on that income, provided it stays within the annual limit.
The relief was introduced to encourage people to make use of underused space in their home and help ease pressure on the private rental market. It is only available where the room is in your principal private residence — the home where you normally live. You do not have to own that home: a tenant who sub-lets a room in their own rented main residence can also qualify (provided their own lease permits it). It does not apply to an investment property or holiday home you don't live in.
The €14,000 Exemption Limit
Revenue sets an annual exemption of €14,000 on the gross rental income from the room. This is calculated on the gross amount you receive — before deducting any expenses.
- If your gross rental income does not exceed €14,000: you pay no income tax, USC, or PRSI on it
- If your gross rental income exceeds €14,000: the entire amount is taxable — not just the portion above the threshold
This cliff-edge effect is important. If you earn €14,001, you owe tax on the full €14,001, not just the €1. Consider that carefully when setting rent for a lodger.
Example (Revenue.ie): John rents a room in his home during 2024. His tenant pays €13,000 in gross rent. John also spent €1,500 maintaining the room. Because his gross income (€13,000) is below the €14,000 limit, John qualifies for the full relief — and pays zero tax. The €1,500 in expenses cannot be deducted (you cannot double-claim expenses when benefiting from the exemption).
Qualifying Conditions
For your room rental to qualify for the relief, three conditions must be met:
- The gross income must be at or below €14,000 in the tax year
- A minimum continuous letting period of 28 consecutive days — the relief does not apply to short-term lettings (including Airbnb-style holiday lets)
- The room must be in a "qualifying residence" — your principal private residence (the home where you normally live)
What Income Counts?
The relief applies to income received for the use of a room or rooms in your home. This includes rent, and any amounts paid for food, laundry, or other services provided to the tenant, as long as it is within a domestic arrangement.
Important exclusions — you cannot claim the relief on income from: - Your own child (or the child of your civil partner) - Your employer - Short-term guests, including those who book through online platforms (Airbnb, Booking.com, etc.)
Who Can Use This Relief?
- You must be an individual taxpayer (companies cannot use it)
- The property must be your home — the place you live day-to-day (you can own it or rent it; ownership is not required)
- If you are jointly assessed with a spouse or civil partner, the €14,000 limit is shared between both parties (not doubled)
Minimum Letting Period — The 28-Day Rule
Since 1 January 2019, the relief does not apply to letting periods of 28 consecutive days or fewer. This rule was introduced to prevent homeowners from claiming the relief on short-stay tourist lets.
Exceptions to the 28-day rule: - Students staying for an academic term or year (including language students) - Respite care for incapacitated individuals - Four-day-a-week "digs" arrangements (common for workers who commute and return home at weekends)
How Does It Affect Other Taxes?
This is where Rent-a-Room Relief genuinely stands apart from buy-to-let rental income:
| Tax | Impact |
|---|---|
| Income Tax | Exempt (if under €14,000) |
| USC | Exempt (if under €14,000) |
| PRSI | Exempt (if under €14,000) |
| Mortgage Interest Relief (TRS) | No effect — you keep it in full |
| Owner-Occupier Relief | No effect |
| CGT (when you eventually sell) | No effect — your PPR exemption is preserved in full |
The CGT treatment is crucial. If you rent a room in your home and later sell the property, the entire sale is still covered by the PPR (Principal Private Residence) CGT exemption — meaning no Capital Gains Tax on any profit from the sale. This is the opposite of a buy-to-let property, where selling triggers a 33% CGT charge on the gain.
How Do You Claim the Relief?
The relief is claimed via your annual income tax return:
- If you are a PAYE worker who does not normally file a tax return, you must file a Form 12 (or use myAccount on Revenue.ie) in the year you receive Rent-a-Room income
- If you are already registered for self-assessment, declare it on your Form 11
- Enter your gross Rent-a-Room income in the designated section — Revenue will apply the exemption automatically if the income is within the limit
Keep records: Record all rental payments received, and keep note of the letting period (start and end dates), to confirm you meet the qualifying conditions.
Rent-a-Room vs. Buy-to-Let
| Rent-a-Room Relief | Buy-to-Let (standard rental income) | |
|---|---|---|
| Tax on income | Exempt up to €14,000 | Taxable at marginal rate (20% or 40%) + USC + PRSI |
| Property type | Must be your home (PPR) | Investment property |
| CGT on sale | PPR exemption preserved | 33% CGT on gain |
| Mortgage interest deduction | Allowed elsewhere (TRS) | 100% deductible from rental profits |
| RTB registration | Not required | Required |
| Deposit required | None extra | 25–30% |
If you own your home and have a spare room, Rent-a-Room Relief is a significantly more tax-efficient way to earn rental income than buying a second property to rent out. The combination of zero income tax below €14,000 and a preserved CGT exemption makes it one of the most generous reliefs available to Irish homeowners.
Common Questions
Q: Can I use Rent-a-Room Relief if I have a mortgage? Yes — having a mortgage on your home does not affect your eligibility for the relief. Your Mortgage Interest Relief (TRS) is also unaffected by using the scheme.
Q: Does the €14,000 limit include bills and meals paid by the tenant? Yes. The €14,000 limit applies to the total gross amount you receive in connection with the room — including contributions to bills, food, or laundry if included in the arrangement. Add all of these together when checking whether you are above or below the limit.
Q: What if I go over €14,000 slightly — can I just stop charging rent for a few months? The limit applies to the full tax year (1 January to 31 December). If you have already received more than €14,000 during the year, you cannot undo it. The key is to set rent carefully at the outset to stay within the cap, or to accept that all income will be taxable if the limit is exceeded.