Student tax relief should account for high accommodation costs.
August 09, 2022
Student tax relief should account for high accommodation costs. The tax relief currently available to students should include accommodation costs to help alleviate the stress and pressure they encounter.
Current tax relief is granted at the standard rate of income tax, currently 20%, where an individual pays “qualifying fees” or tuition fees in respect of an approved course & this includes the “student contribution”.
There is no specific provision for a tax relief when it comes to student accommodation costs. Whether it is a higher rate or a targeted relief, those eligible should be able to claim more to offset this cost.
We’re approaching a new college semester and students are in the midst of accommodation hunting, an often difficult and time-consuming process. This also puts pressure on parents and families who are trying to find the best option.
We’ve seen the positive impact of the Rent-a-Room scheme which supports third level students with relief to people offering rooms for rent within their sole or main home and this rental income is exempt from PRSI/ USC. This could be a worthwhile consideration for people living close to third level campuses all around the country. However, we need to do more to ensure students have increased choice when it comes to accommodation.
The Government has agreed to a significant intervention in recent weeks where the State would pay colleges to build accommodation in return for cheaper rents. This is incredibly important, but it will take time to implement.
In comparison to last year, there are 1,200 additional beds. As we continue to increase supply, we must ensure that do everything we can to assist families with the cost of accommodation.
My colleague Minister Simon Harris and his Department have also made changes to support students and families by increasing the income threshold levels of support by €1,000 with Student Universal Support Scheme (#SUSI) as well as an additional €200 for the maintenance grant. The reduction of the eligible distance to college from 45kms to 30kms means more students are eligible for support and recent reductions of 50% in public transport fares mean more economical options to travel to college.
Sourcing accommodation can be a stressful part of the college experience. As supply increases, students should be met with more diverse choices and something to lessen the financial burden. Fresh ideas should be welcomed and supported to deliver for our students.
Interested in Rent-A-Room Scheme?
For you to qualify for Rent-a-Room Relief the following conditions must be met:
* The gross income from the rent must be below the exemption limit
* There must be a minimum continuous-letting period
* The room must be in a ‘qualifying residence’.
There is an annual exemption limit for Rent-a-Room Relief. This limit applies to the gross amount of income received for the room or rooms in your home. Since 2017, the annual exemption limit is €14,000.
The gross income is the total income before you deduct expenses.
Expenses include the maintenance of the room let and capital allowances due on fixtures and fittings.
If your gross rental income does not exceed the exemption limit, you do not pay:
*Pay Related Social Insurance (PRSI)
*Universal Social Charge (USC).
If the gross rental income does exceed the exemption limit, the total amount of income is taxed.