Parliamentary Question addressed to the Minister for Finance

To ask the Minister for Finance the way in which the legislation governing the Rent-A-Room Scheme prohibits the exclusion of Airbnb from the scheme or if this is an interpretation of the legislation by the Revenue Commissioners; and if he will make a statement on the matter?

Rent-a-room relief is provided for in section 216A of the Taxes Consolidation Act (TCA) 1997. Under section 216A, sums arising to an individual in respect of the letting of a room or rooms as residential accommodation in his or her home and from meals or other services supplied in connection with the letting, are exempt from income tax where they are below the annual limit for the tax year in question (€12,000 for 2015) and certain other conditions are satisfied.  

The purpose of the relief is to increase the supply of rental accommodation by incentivising homeowners to rent out rooms in their principal primary residences to individuals on a residential basis, that is where the individuals are effectively using the room(s) either on its own or in conjunction with other parts of the residence as their home. It is not, and never was intended to apply to income arising from the provision of guest accommodation to occasional visitors.  

Under section 849 of the TCA 1997, all duties of tax are placed under the care and management of the Revenue Commissioners. I am further advised by the Commissioners that, having regard to both the express policy intent of the legislation and the construction of section 216A, which refers to residential accommodation as opposed to guest accommodation, they have consistently taken the view that the relief does not apply in respect of income from the provision of accommodation to occasional visitors for short periods or where rooms are let for business use or guest accommodation. This position is clearly stated in Chapter 7.1.32 of Revenue’s Income Tax, Capital Gains Tax and Corporation Tax Manual, which is available on www.revenue.ie . The manual was updated in February 2015 to reflect the fact that I increased the annual limit for the relief from €10,000 to €12,000 for 2015.  In that context, Revenue took the opportunity in the light of media comments, to emphasise that the exclusion of short term guest accommodation applies equally where such accommodation is provided through an online accommodation booking site such as Airbnb.  

Any question relating to the charging of income tax is a matter for Revenue. In this regard, the Commissioners advise that property owners who receive income from the provision of occasional guest accommodation should make a return of their taxable profits to Revenue and pay the resultant income tax, if any, under self-assessment rules in the normal manner.

Finally, I should say that in relation to calls from a number of quarters to extend rent-a-room relief to income earned from the provision of short term guest accommodation to occasional visitors, I am mindful that acceding to such requests could lead to unfair competition in the guest accommodation sector generally, by placing B&B and guest house operators who provide accommodation in the course of a trade at an unfair disadvantage.