2027 tax changes: The future Budget 2027 tax measures described here remain subject to enactment of Finance (No. 2) Bill 2026. These announced figures were checked on 29 October 2026 against the Department of Finance’s corrected tax policy document dated 12 October 2026.
Rent-a-Room Relief limits in 2026 and 2027
| Tax year | Annual gross-income ceiling |
|---|---|
| 2026 | €14,000 |
| From 1 January 2027 | €16,000 |
The test uses gross income before expenses. Include amounts for services connected with the room, such as meals, cleaning or laundry. You cannot deduct expenses to bring gross income below the ceiling.
Where more than one person receives the income, the relevant ceiling is divided between them. The Budget 2027 Ireland measures also provide for one €16,000 ceiling across all qualifying Rent-a-Room income per taxpayer unit.
Rent-a-Room Relief concerns the homeowner or occupier’s rental income. A tenant’s Rent Tax Credit is a separate relief with different conditions.
What if you exceed the limit?
If gross income exceeds the ceiling, no Rent-a-Room exemption applies for that year. The whole rental income becomes taxable, although normal allowable rental expenses may then be deductible under the usual rules. There is no relief just for the part below the ceiling.
What home qualifies?
The room must generally be in a residence you occupy as your sole or main residence during the tax year. A self-contained unit attached to the home can qualify under current rules, but an ordinary detached property beside the home does not automatically qualify.
Budget 2027 extends the relief to certain Designated Auxiliary Dwellings installed after 27 July 2026 that comply with the 2026 planning regulations. The Budget publication does not yet provide the full Revenue claiming or evidence rules, so check the enacted legislation before relying on this extension.
Long-term letting and exclusions
The letting generally must be for more than 28 consecutive days. Exceptions can apply to certain non-leisure stays, including student accommodation, respite care and four-day-a-week digs.
You cannot claim the relief for income from:
- your child or your civil partner’s child
- your employer
- short-term guests, including typical online holiday bookings
- a property that is not your qualifying main residence.
Letting to a student for an academic year or term can qualify.
How to report the income
You must report qualifying income on your annual Income Tax Return even when the relief means no Income Tax, USC or PRSI is due on it. PAYE taxpayers can file through Revenue myAccount; self-assessed taxpayers use their normal Form 11 process.