As property prices have climbed, more first-time buyers are looking at renting out a spare room to help offset their mortgage repayments.
The tax relief
Under Ireland's rent-a-room relief, income you earn from renting a room (or rooms) in your own home to a private tenant is exempt from income tax, provided the total rental income doesn't exceed €12,000 per year. Go over that threshold and the full amount becomes taxable, not just the excess — so it's worth keeping track of what you're charging.
A note on affordability assessments
Lenders generally don't factor potential rent-a-room income into how much they'll lend you, since it isn't guaranteed income. It's best treated as a helpful bonus toward your monthly repayments once you're in the property, rather than something that will stretch your approved borrowing amount.
