Agreement in principle on plan to allow tax-free rental of back garden cabins
There is agreement in principle at the top of Government for the rent-a-room scheme to apply to back garden cabins, but more work is needed before the proposals can go to Cabinet.A Government spokesman said some Ministers raised “a few questions” about the details of the proposals but he did not think there was “any disagreement on the overall plan”. The questions relate to how the scheme will work in practical terms, he said, amid speculation on why the plans did not go to Cabinet on Wednesday, despite media reports they would.The measures proposed by Minister for Housing James Browne and Minister of State for Planning John Cummins could allow homeowners to earn up to €14,000 in tax-free income by renting out units in their gardens. These dwellings, of up to 45sq m, would be exempt from planning permission.The Government spokesman said the proposals for exempted developments were not confirmed to be on the Cabinet agenda, and, “like a lot of these memos, it just needs some more work”. READ MOREOne crew member rescued after US fighter jet shot down in Iran, reports sayManager reported 20 claims of financial and legal wrongdoing at Wilson’s Hospital SchoolTrump’s decision to fire devoted Pam Bondi reboots focus on Epstein filesBank of Ireland chief Myles O’Grady: ‘We are seeing, on a grand scale, intergenerational wealth’ The plans were discussed at the pre-Cabinet meeting of Coalition leaders on Wednesday morning. The spokesman said the Attorney General “has some general observations” and “there’s some further issues to look at”.Sources said there is an agreement in principle for the rent-a-room scheme to apply to garden cabins, but the Attorney General’s input is needed on the detail.There is an expectation among some in Government that the proposals could be on the Cabinet agenda as early as next week.Tánaiste Simon Harris on Wednesday morning said he expects the modular unit planning exemptions to be “popular”. Allowing homeowners to rent out these spaces and earn up to €14,000 a year tax free is “sensible”.“My sense is that on balance, the rent a room makes sense ... because we do have a housing emergency, we should be taking practical measures to help people in the here and now,” he said.[ Back-garden living incentives could expose older homeowners to abuse, charities warnOpens in new window ]Opposition parties have rounded on the proposal, with Sinn Féin’s housing spokesman Eoin Ó Broin claiming renters would have “absolutely no rights” under the Government’s “beds in sheds” idea.He was strongly against a possibility that renters in modular units could become licencees rather than tenants, as he said this would mean they would have “no protections” and would not have recourse to the national rental oversight body, the Residential Tenancies Board.Rory Hearne, housing spokesman for the Social Democrats, said there were a “litany of flaws” with the policy and a lack of safeguards to protect renters. His party supports modular housing, he said, but “only when it’s done right” and “planned appropriately”. The rent-a-room scheme allows homeowners to earn €14,000 tax free by r renting out a room within their home. It does not operate under standard tenancy agreements and falls outside the Residential Tenancies Act as the properties are owner-occupied. Meanwhile, grants of up to €135,000 are now available to convert vacant spaces above shops into homes, where the upper floors have been vacant for at least two years. With the move, the Minister for Housing aims to unlock unused units in cities, towns and villages. The vacant property refurbishment grant has been available for vacant and derelict homes since July 2022, with 5,200 properties brought back into use through the scheme.The highest level of funding is for spaces converted into three residential units. Where one or two units are created, grants of up to €95,000 and €115,000 respectively will be available. An additional €5,000 is on offer to cover professional advice on above-the-shop conversions.Additional €40,000 top-ups on the existing €70,000 vacant property grant are available where an entire former commercial property is being converted into multiple homes.
