Thousands of renters are expected to miss out on up to €1,000 in rent relief for 2022 due to a lack of awareness around the new scheme.
A survey has revealed a widespread lack of knowledge which is likely to lead to potential underuse across the board.
As rents continue to soar alongside a shortage of housing, thousands of people could benefit from the €1,000 boost announced in Budget 2023.
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Findings from a Taxback.com ‘Taxpayer Sentiment survey’ found almost seven in ten people are not aware that they are eligible to receive the rent credit.
This has prompted the tax refund specialists to warn that the effectiveness of the relief is likely to be limited if the Government and other bodies don’t do more to inform people of their eligibility.
The experts say they are very concerned this new relief won’t just be added to a long list of reliefs that not enough people know about and subsequently use.
Marian Ryan, a Consumer Tax Manager with Taxback.com explained: “There are 600,000 people renting residential properties in Ireland at present.
“Rents in this country have increased by 14.1pc over the last year, according to the latest report from Daft.ie.
“This is the highest annual increase recorded since Daft began reporting on rents in 2006. People are under a lot of financial strain.
“The rent credit, while not huge, will come as a welcome support to those who claim it but our guess is that not enough people will because they simply don’t know about it”.
The credit, which was introduced back in September 2022 as part of the Budget is available to tenants, or parents paying rent on behalf of a student child, and is worth up to €500 a year for single people and up to €1,000 a year for married couples and civil partners.
It will be available for the tax years 2022, 2023, 2024, and 2025, once a claim is made to the Revenue Commissioners.
Ms. Ryan added: “Even though the rent credit was only introduced on Budget Day, this credit can be claimed for 2022 as well as 2023, 2024, and 2025.
“It is unusual for a tax relief introduced on Budget Day to be claimable in the same year that that same Budget was announced, so even those who have heard of its introduction could mistakenly believe that they cannot claim the rent credit for 2022.
“Once you’re eligible for it though, it is possible to claim the rent tax credit for 2022, and given the steep rental costs so many are facing, taxpayers should make it their priority to do so”.
She went on to say: “We don’t believe the rent tax credit goes far enough. €500 a year per person is only a drop in the ocean compared to the high rents people have to pay but it will still be a welcome boost of income for people.
“People have plenty of time to claim the rent credit. You would have until the end of 2026 to claim the 2022 rent credit based on the four-year lookback rule but all the same, it is always worth claiming reliefs promptly.
“Around 400,000 people are expected to be eligible for the rent credit – at a cost to the Exchequer of €200 million a year”.
Taxback.com is urging people paying rent to check if they’re eligible for the rent credit – even if they believe they’re not.
“There are some people who could lose out on the rent credit because they mistakenly believe they’re not entitled to claim it,” said Ms. Ryan.
“If you’re not paying rent for a principal private residence, or on behalf of a child who is living away from home to attend college, it’s worth knowing that you can generally still claim the rent credit if you’re renting a residential property which is different to your principal private residence if you need to rent that property for the purposes of work or to attend an approved course”.
To apply for the rent credit, log onto your Revenue account and submit your tax return for 2022.
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