Renting

Published on July 1st, 2017 | by Martin Clancy

Get Tax Free Rent for Student Digs!

Let digs to students and earn tax free rental income.

Do you have a spare bedroom in your house that’s sitting empty? If you let it out to students, you can make tax-free money off digs.
Under Irish law, you don’t have to pay tax on your rental income from digs unless you pass the cap of €14,000 in any tax year. This tax relief was introduced with the aim of increasing the availability of rented residential accommodation and has the potential to really help with student housing.

There aren’t a lot of bed spaces that young people can afford at the moment so even though you won’t be paying tax on digs income, you’re still doing a social good. Research shows that more and more people are deferring college because they can’t find a place to rent. Letting digs out to students not only brings you in money, it boosts the amount of people going on to 3rd level education and contributes to the economic recovery.

If you’d like to list a spare room for students on Daft.ie click here.

What are the facts on the tax relief for digs?

You cannot avail of tax relief for digs on private rental accommodation. You can only let digs in your place of primary residence. In the same vein, you cannot avail of tax relief for digs on short term leases. For instance, renting the room out to a student over the course of a college year is covered but not taking in different people every few weeks.

You’re exempt from paying tax on any rental income for digs unless you pass the cap of €14,000 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.

Testimonials:

Homeowner, Joe Molloy: My wife, Yvonne, and I have been letting a room to students for about 20 years now. We provide full board (bills included). They’ve a room with their own facilities and they can chose whether or not they want to eat with us or by themselves. We have kids and they’ve always got on well with the students we’ve had. If you’re thinking of letting, just set ground rules from the very start otherwise there will be misunderstandings. Do your best. Try your best to get on with them. Let them integrate or at least offer them the opportunity to, be nice like, decent. Don’t use it as a profit making enterprise. We’ve had some students come to us who’ve had bad experiences, you have to think to yourself how would I like my children to be treated. Us Irish are known for our hospitality so don’t let the side down.

Ag. Science Student, CIAN CASEY: For the last three years I have been living in digs. For me digs was a great experience. For a student who was in and out of rented housing for two years previous it was a nice change. The reason I changed to digs was because no other type of landlords in Dublin were offering a college-year lease (c.9 months). I kept having to take a year-long lease. Until I discovered digs. The family I was living with were familiar with the student timetable so it worked out cheaper than rented accommodation. Simple things like having a conversation at the dinner table about the football matches at the weekend also added to it. As I go into my fourth year in digs, I feel happy recommending this kind of housing and hope that more people consider opening up their homes to students.


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