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Fewer than 50,000 renters have claimed the Rent Tax Credit so far this year

JUST UNDER 50,000 individuals or couples have claimed the Rent Tax Credit this year out of the 400,000 individuals who are eligible to apply, new figures show.

The figures come as the Government contemplates doubling the amount available for renters to claim back in next month’s Budget.

The Rent Tax Credit was introduced in Budget 2023 and is worth €500 per year per claim. Renters who are paying tax on their earnings can claim the money back from Revenue as long as their landlord is registered with the Residential Tenancies Board (RTB).

Judging by the newly released figures, the vast majority of those seeking to claim it have not yet done so. Claimants will, however, have up to four years to claim the credit for this year. 

The measure was introduced to ease pressure on renters as a result of the cost-of-living crisis. It is claimed on a “taxpayer unit” basis, meaning it can be claimed by an individual who is singly assessed or a couple in a marriage or civil partnership who have elected for joint assessment.

The Government has signalled that it plans to increase the Rent Tax Credit in next month’s Budget. Finance Minister Michael McGrath said he was ”examining the rent tax credit” last month.

However, new figures show that just 49,335 taxpayer units had claimed the credit for this year up until 13 September. This is despite the Department of Finance (which oversees the credit via Revenue) estimating that 400,000 individuals are eligible to claim the credit.

The figures were given to Sinn Féin TD and housing spokesperson Eoin Ó Broin and Fine Gael TD Richard Bruton in response to parliamentary questions. 

In total, according to the figures supplied, 286,419 Rent Tax Credit claims have been made by 252,317 taxpayer units for 2022 and 2023 to date. This breaks down as:

  • 202,982 taxpayer units that made claims for 2022 only
  • 34,102 taxpayer units that made claims for both 2022 and 2023
  • 15,233 taxpayer units that made claims for 2023 only

The figures suggest that if 2023 figures are to match that of last year a large cohort of those eligible should make their claim later in the year. 

“First of all, the very low level of uptake for this year is very concerning,” said Eoin Ó Broin.

What it shows is that a very significant number of renters either don’t know about this Tax Credit or they haven’t claimed it.

Ó Broin said that the government had not done enough “to ensure that those renters who need this credit but are least able to access it” are catered to.

He said that people from migrant or lower income backgrounds may not be aware of the existence of the credit or how to access it and that more needed to be done to advertise its availability.

“We need the Residential Tenancies Board and the Department of Finance to be much more proactive in showing that this is available,” he said.

RTB registered

Ó Broin also said it had been reported to him that the fact that a tenancy had to be registered with the RTB provided a barrier for many tenants.

“We’re hearing lots of complaints that RTB registration being mandatory is a real problem,” he said.

Renters may not wish to contact a landlord to ask them to register in case this puts their tenancy at risk, he said.

One person renting in Dublin with their partner spoke with The Journal on condition of anonymity. They said they would not be claiming the credit even though they were entitled to do so, as their tenancy was not registered with the RTB.

“There’s a very strong financial incentive for us to shut up and say nothing and not claim this tax rebate,” they said.

“Because if there was any suggestion going anywhere close to Revenue that might mark those payments down as rental income benefitting someone else, I’d be seriously jeopardising my personal relationship with the landlord and consequently my entire ability to stay in this country and work.”

The person said they would like to be able to claim the credit, but that it was preferable to be able to live somewhere, as they had been “completely priced out of the market” in Dublin.

“We’re taking this because it’s the only thing we’ve got,” he said.

It’s not a position I would like to be in, I would prefer to have things done above board, but this is the only place we were able to get. 

Information campaign

According to Gareth Redmond, research and policy officer with tenancy support charity Threshold, one the biggest reasons the charity has identified among its users for not claiming the credit is a lack of awareness.

“What is indicative from our data is not knowing how [to claim it] and also not knowing about it,” he said.

In Threshold’s latest annual survey of its clients – We are Generation Rent 2023 – the charity spoke to 119 people about their experience of renting in Ireland. 

In total, two-thirds of respondents were aware of the credit, but only 44% had applied or were planning to. The biggest reason for not applying was ineligibility, with 40% of respondents unable to apply as they were already in receipt of housing supports.

Over 20% of people hadn’t applied as they were unaware of the credit. According to the results of this survey – which is not nationally representative as it only included people already engaging with Threshold – less than 5% of respondents said they had not applied as their landlord was not registered with the RTB.

Commenting on the results, Gareth Redmond said the Government needed to do more to make people aware of the credit.

“One of the things that Threshold would want to stress is that the Rent Tax Credit itself is very much a cost of living measure and from what our understanding is, it’s that the Government very much want take up of that,” he said.

“The Government need to carry out a stronger public information campaign to tell a certain cohort of renters that they are eligible for this money. A very clear example of that is renters for whom English may not be their primary language.

And groups of migrant renters specifically need to be targeted with information in their native languages.

Finance response

In response to queries, a spokesperson from the Department of Finance said that as the credit was made on a “taxpayer unit” basis, “we would not expect to see 400,000 taxpayer units claim the credit”.

“We also would note that tax refunds can be requested within four years after the end of the tax year to which the claim relates, so it is possible that eligible persons may not claim the Rent Tax Credit in respect of 2022 until 2026,” the spokesperson said.

Similarly, self-assessed taxpayers will not be making their 2022 tax returns until 31 October 2023 and if eligible for the Rent Tax Credit can claim it at this stage.

For PAYE workers, the spokesperson said that people had the option of claiming the credit throughout the year as the rent is incurred, or at the end of the year through their Income Tax return.

“As such, while taxpayers can claim for the credit during the year, many may wish to wait until the end of year whilst they are making their tax return to claim the Rent Tax Credit,” they said.

Revenue is conducting an information campaign to highlight the ease of use of the online myAccount system and to raise awareness of a range of key tax credits and reliefs available to taxpayers including the rent tax credit.