Garden Homes

Budget 2027 · Rent-a-Room relief

Rent-a-Room relief now covers garden homes.

Budget 2027, announced on 6 October 2026, extends Rent-a-Room relief to detached garden homes of 32 to 45 m² built under the new planning exemption, and raises the tax-free limit to €16,000 a year from 1 January 2027. Here is what was announced, which garden homes it covers, and what to check before you count on it.

Published 12 October 2026

What was announced

Three changes in one line of the Budget.

  • The limit rises to €16,000

    The tax-free limit goes from €14,000 to €16,000 a year from 1 January 2027.

  • Garden homes are now included

    Until now, a self-contained unit not attached to the house did not qualify. The relief is extended to detached homes built in back gardens under the new exemption.

  • It goes back to 27 July 2026

    The extension applies from the day the garden home exemption came into operation.

Which garden homes qualify

Built under the exemption, and every condition met.

As announced, the relief covers a detached garden home that is:

  • Built from 27 July 2026

    A cabin or garden room already standing before then is not covered.

  • Between 32 and 45 m²

    The same size range as the exemption. A smaller unit does not qualify.

  • Compliant with the planning exemption

    Every condition of S.I. No. 340 of 2026: side access, the 45 m² limit across everything already in the garden, 25 m² of garden kept, 0.6 m from every boundary, the height limits and the 14-day notice. If the garden home does not meet the exemption, the relief does not follow.

So the first question is still the garden.

The relief only matters if your garden can take a compliant home. Our free check answers that from your Eircode, and the garden checker gives you a first read in a minute.

How the relief works

The usual Rent-a-Room rules still apply.

  • It is your home

    The main house has to be your sole residence.

  • One limit for everything

    The limit covers all the rent and anything paid on top of it, such as utilities or food.

  • Go over it and you lose all of it

    If the total goes over the limit, none of it is tax-free that year. The whole amount is taxed as ordinary rental income, less allowable expenses.

  • Not for short stays

    Lets of 28 days or less in a row do not count. The garden home exemption rules out short-term letting in any case.

  • Not rent from your own child

    Rent paid by your child, or your spouse’s or civil partner’s child, is not covered. Other family members, such as a niece or nephew, are not restricted.

  • Claimed on your tax return

    You declare the income and claim the relief on your annual return. No expenses are deducted when you claim it.

Before you count on it

Announced is not the same as law.

Budget tax changes take effect through the Finance Act, and Revenue publishes its own guidance on the detail. Until both are out, treat this as an announcement. Check the position with Revenue or your accountant before you build a plan around it.

The planning conditions do not change.

A garden home under the exemption cannot be used for short-term letting, and it cannot be sold or subdivided away from the main house. The relief sits alongside those conditions; it does not replace them. More on who can live in a garden home.

We are not tax advisers, and we do not publish income figures: the right number depends on your own income and circumstances. What we do is make sure the garden home itself qualifies, because without that there is no relief to claim.

Start with the garden

Will your garden take one?

Answer a few questions for a first read straight away, then send your Eircode and we will check it properly. Free.

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