52. Deputy Maeve O'Connell asked the Tánaiste and Minister for Finance if his Department will consider increasing the rent-a-room tax allowance in line with inflation. [46117/26]

Rent-a-Room relief, which is provided for in section 216A Taxes Consolidation Act 1997 (TCA), was introduced in 2001 with the aim of increasing the availability of rented residential accommodation. The relief acts as an incentive to encourage individuals to let rooms in their principal private residence as residential accommodation in order to bring about an increase in the availability of rental accommodation.

In accordance with section 216A TCA, an individual who lets a room or rooms in her or his sole or main residence as residential accommodation may be exempt from income tax, PRSI and USC in respect of income from the letting where the aggregate of the gross rents and any sums for meals or other services supplied with the letting does not exceed the threshold at present of €14,000 per year. Although the income is exempt it must be included in the individual’s tax return for the year in question.

The relief is not available where the sums received are from a child to a parent, or from a child to their parent’s spouse or civil partner. However, there is no restriction where rent is paid by other family members, for example, a niece or nephew.

Rental income which is not eligible for Rent-a-Room relief, for example where the amount exceeds €14,000 or where the self-contained unit is not attached to the residence, is subject to Schedule D Case V income rules. The income, after deduction of allowable letting expenses, is subject to tax as part of the individual's total taxable income. In this way, individuals who are landlords may be subject to income tax at their marginal rate of tax in addition to which USC and PRSI will also apply.

As the Deputy will appreciate, any revisions to the scheme would have to be considered as part of the annual Budget and Finance Bill processes and take into account the effective operation of the scheme and the impact any proposed changes would have on the broader housing market.  Furthermore, it is a longstanding practice of the Minister for Finance not to comment in advance of the Budget on any tax matters which might be the subject of Budget decisions.