Digs for Students, Tax-Free Cash for Homeowners!
So you have a spare room? Maybe the kids have flown the nest or you just have extra space sitting empty. You could always rent the room out as digs to make some more money, and the great news is that the money is tax free.
You don’t have to pay tax on income from digs unless you pass the cap of €12,000 in any tax year. This tax relief comes under the rent-a-room scheme and was introduced with the aim of increasing the availability of rented residential accommodation.
There aren’t a lot of bed spaces for rent at the moment so even though you’re not paying tax, you’re doing a social good for Ireland. Research shows that more and more people are deferring college because they can’t find a place to rent.
To list your room on Daft.ie click here.
What are the facts on Rent-A-Room relief for digs?
Firstly, your home must be located in Ireland and you must occupy it as your sole residence.
You qualify for the relief in cases of residential tenancies, not short-term lets. Whomever takes the room, must be using it for a long-term rather than a short-term basis. For instance, renting the room out to a student over the course of a college year is covered, but taking different people in every weekend is not.
You’re now exempt from paying tax on any of that rental income unless you pass the cap of €12,000 in any one tax year.
Rent-a-room relief will not affect your mortgage interest relief or your exemption from Capital Gains Tax (CGT) if you sell your home.
To find out more information on Rent-A-Room Relief check out Revenue.ie.
To list your room on Daft.ie click here.
Arts Student, Rachel Hally told us: “I can honestly say that I adore living in digs! What is my story you ask? Well, applying to UCD was not necessarily my most thought-out plan – I was 16, from Cork, going to college knowing no-one and had not fully thought about the ‘where would I live’ situation. I had been unaware of the on-campus accommodation until very late, so ultimately I was not accepted. After trying for weeks to find housemates and maybe a house, I lost all hope and was considering deferring the year, until my family found out about digs. Digs has been my saviour for the last few years. Having found an amazing family to live with I was offered my own room, a warm house (a lot harder to come across when you are not in digs) as well breakfast and dinner. All in all, I will live in digs again next year if I come back to UCD and would hope that other homeowners and families would open up their homes to students.”
