Digs Accommodation Rent Tax Credit

If you're a student or young professional renting a room in someone's home under the Digs accommodation scheme in Ireland, you could be entitled to significant tax relief. The Digs Accommodation Rent Tax Credit has been enhanced for 2025, offering up to €750 per person annually—a substantial increase from the previous €500. This dedicated tax credit recognises the unique nature of digs accommodation and provides valuable financial support to those renting rooms in privately-owned homes. Whether you've been living in digs for years or just started this accommodation arrangement, understanding how to claim this credit could put hundreds of euros back in your pocket.

What Makes Digs Accommodation Different?

Digs accommodation refers to a specific rental arrangement where you rent a room in a property that remains the landlord's primary residence. Unlike traditional renting where you have a standalone apartment or house, digs means you're sharing the home with the property owner. This arrangement is particularly common among students attending Irish universities and colleges, as well as young professionals starting their careers.

The key distinction that makes digs accommodation eligible for this specific rent tax credit is that your landlord lives in the property with you. This differs from standard rental situations covered under the general rent tax credit scheme in Ireland, though both offer valuable tax relief opportunities.

2025 Digs Rent Tax Credit Rates

The Irish government has increased the Digs Accommodation Rent Tax Credit for 2025, reflecting the ongoing challenges of rental affordability. Here's what you can claim:

• Single person: €750 per year
• Married couples or civil partners: €1,500 per year (combined)
• Backdating: Claims can be made retrospectively to December 2022
• RTB Registration: Your landlord must be registered with the Residential Tenancies Board

This increase from €500 to €750 represents a 50% boost in available relief, demonstrating the government's commitment to easing the financial burden on renters in shared accommodation situations.

Essential Eligibility Requirements

Before claiming your Digs Accommodation Rent Tax Credit, you must ensure you meet all the qualifying criteria. The requirements for 2025 include:

Understanding the full eligibility criteria for rent relief in Ireland is crucial to ensure you're claiming the correct amount and avoiding any complications with Revenue.

Real-World Examples: How Much Can You Save?

Example 1: Third-Year University Student

Sarah is a 21-year-old student at Trinity College Dublin, paying €550 per month for digs accommodation near campus. She works part-time and pays tax at the 20% rate. With the 2025 digs rent tax credit of €750, Sarah will receive a tax refund of €150 (€750 × 20%). If she also backdate her claim to December 2022, she could receive an additional €250 for previous years (€500 × 20% × 2.5 years), bringing her total refund to €400.

Example 2: Young Professional Couple

Michael and Emma are a married couple who both work full-time and pay tax at the 40% rate. They've been renting a large room in their landlord's home in Cork while saving for a house deposit. As a couple, they're entitled to claim €1,500 for 2025. At the 40% tax rate, this means a combined refund of €600. By backdating to December 2022, they could receive up to €1,500 in total refunds over the eligible period.

Example 3: Recent Graduate in First Job

James graduated in 2023 and moved to Galway for his first job. He's been living in digs accommodation since January 2023, paying €600 monthly. As a standard-rate taxpayer (20%), James can claim €150 for 2025 (€750 × 20%). He can also backdate his claim to January 2023, recovering an additional €200 for 2023 and 2024 (€500 × 20% × 2 years), resulting in a total refund of €350.

Example 4: Maximum Backdating Scenario

Aoife has been in the same digs accommodation since September 2022 and only recently learned about this tax credit. She's a higher-rate taxpayer (40%). By claiming for 2025 and backdating to December 2022, she can recover: €300 for 2025 (€750 × 40%), plus €600 for the previous eligible period (€500 × 40% × 3 years), totaling €900 in tax refunds.

How Backdating Works for Digs Accommodation

One of the most valuable aspects of the Digs Accommodation Rent Tax Credit is the ability to backdate claims to December 2022. This means if you've been living in qualifying digs accommodation since late 2022 but haven't yet claimed the credit, you can recover multiple years of tax relief in one claim.

The backdating structure works as follows:

• December 2022 - December 2023: €500 credit available
• January 2024 - December 2024: €500 credit available
• January 2025 onwards: €750 credit available

This means a taxpayer at the 20% rate who has been in qualifying digs since December 2022 could receive up to €350 in backdated refunds, plus €150 for 2025, totaling €500. Professional tax advisors can ensure you maximize your backdated claim and don't miss out on any entitled relief.

The RTB Registration Requirement

A critical requirement for claiming the Digs Accommodation Rent Tax Credit is that your landlord must be registered with the Residential Tenancies Board. This registration demonstrates that your rental arrangement is legitimate and compliant with Irish tenancy laws.

You can verify your landlord's RTB registration by:

• Asking your landlord directly for their RTB registration number
• Checking the RTB's online register at rtb.ie
• Requesting confirmation during your claim process through professional tax advisors

If your landlord is not registered with the RTB, they legally should be, and you may need to encourage them to complete this registration before you can claim your tax credit. Professional tax services can guide you through this situation and help ensure compliance.

Digs vs. Standard Rent Tax Credit

It's important to understand that the Digs Accommodation Rent Tax Credit is separate from the standard rent tax credit. You cannot claim both simultaneously, so you need to determine which applies to your situation:

For comprehensive information on all rental tax relief options, consult the complete guide to applying for rent tax credits online.

Documentation You'll Need

When claiming your Digs Accommodation Rent Tax Credit, having the proper documentation is essential for a smooth claim process. Gather the following:

• Proof of rent payments (bank statements, receipts, or transfer records)
• Your landlord's RTB registration number
• Your landlord's name and address
• Documentation showing the property is your landlord's principal private residence
• Your PPSN (Personal Public Service Number)
• Details of the period you've been living in the digs accommodation

Professional tax advisors at MyTaxRebate.ie can review your documentation to ensure you have everything needed for a successful claim and help you gather any missing information.

Common Mistakes to Avoid

Many people miss out on their full entitlement or experience delays due to common errors. Here are mistakes to avoid when claiming your Digs Accommodation Rent Tax Credit:

Why Professional Assistance Maximizes Your Refund

While the concept of the Digs Accommodation Rent Tax Credit may seem straightforward, navigating the complexities of Irish tax law, ensuring proper documentation, and maximizing backdated claims requires expertise. Professional tax advisors understand the nuances of eligibility, can identify additional tax reliefs you may qualify for, and ensure your claim is processed correctly the first time.

The tax professionals at MyTaxRebate.ie specialize in Irish rent tax credits and have helped thousands of tenants recover the maximum amount they're entitled to. From verifying RTB registration to calculating complex backdated claims across multiple tax years, expert guidance ensures you don't leave money with Revenue that rightfully belongs in your pocket.

Frequently Asked Questions