Only 20% of those who may be eligible for the €1,000 renters’ tax credit have claimed it so far this year, new figures have shown.
Approximately 70,580 taxpayers have claimed it this year, even though about 400,000 are eligible.
The tax credit was increased last week in Budget 2025 from €750 to €1,000 and backdated to include this year. It was introduced in 2022.
However, only 313,980 taxpayers claimed it in 2022, and 268,120 in 2023.
The new figures were supplied this week by Minister for Finance Jack Chambers. He said: “Most claims for credits by PAYE taxpayers take place after the year-end, and it is expected that the bulk of claims for 2024 will not be made until 2025.”
When claimed for a previous year, the tax credit results in a refund issued directly to a taxpayer, so that they receive it as a full payment.
For example, depending on their gross tax liability and use of other tax credits and reliefs, a renter could receive €1,000 in January 2025, when they claim for the rental tax credit for 2024.
In announcing the increase to €1,000, on Tuesday, Mr Chambers said that it has so far “played a valuable role in providing financial support to renters right across the country”.
Finance Minister Jack Chambers said the initiative ‘played a valuable role in providing financial support to renters right across the country’. Picture: Leah FarrellHe said it was being increased “in recognition of the cost-of-living pressures facing many renters right now”.
The decision to raise the rent tax credit in Budget 2025, while welcomed in many quarters, was also criticised as a measure that does not get to the root of housing issues in Ireland and does not help renters long-term.
The students’ union at University College Cork said that, as a one-off measure, the rent tax credit “only serves to postpone investing in the root of the issue”.
“And the over-reliance on premium student accommodation providers to plug demand in the interim is not sustainable,” the students’ union added.
Social Justice Ireland called the tax credit a “failed policy” that is “inherently unfair” and has “done little to make renting more affordable”.
Accounting firm RSM Ireland said that while the increased tax credit provides immediate financial support and is a welcomed change in the budget, it does not tackle the cause of the housing crisis.
“Individuals renting private accommodation need more sustainable solutions to ensure that they can find affordable homes, rather than a temporary relief that may not keep pace with rising rents,” it said.
