Property insights with Johnny Gannon, Fair Deal Property
CAO offers land next week, and for thousands of families the celebration will last about a day before the question arrives: where is my son or daughter going to live? University of Galway has raised on-campus rents to within touching distance of the legal two per cent ceiling; the dearest campus bed in Dublin now costs close to €12,000 a year. And the Government's strategy tells us the cavalry is not coming: it targets 42,000 student beds by 2035, but not one additional bed will be ready this September. A first-year student starting this autumn will have graduated before that plan delivers in real volume.
So we can spend the month lamenting the strategy, or we can talk about the supply that already exists.
Here is the statistic that reframes everything. Ireland has the second-highest rate of under-occupied homes in Europe: two-thirds of us live in houses with more bedrooms than we need, beaten only by Cyprus and double the EU average. It is the strange paradox of the Irish housing crisis. On the one hand we have a chronic shortage of houses; on the other, a massive oversupply of bedrooms.
How did we get here? Family sizes collapsed within a generation. Households that once raised six or seven children now raise one or two, or none, while the houses themselves have roughly doubled in size. Layer on an ageing population and the result is a country of empty nesters in four- and five-bedroom homes, with almost nothing suitable built for them to downsize into. They are not hoarding space; they are stuck in it. Between those facts lies a solution: certainly for the student crisis this September, and perhaps, in time, for our accommodation crisis in general.
Galway's fastest student housing is not in any strategy document. It sits behind the spare-room doors of thousands of houses across this city and county.
The rent-a-room scheme remains, in my view, the most generous and least used tax relief in Ireland. A homeowner can earn up to €14,000 a year from letting a room in their own home free of income tax, USC and PRSI. Traditional digs — a student staying Monday to Friday during term — qualify fully. A typical digs setup at €130 to €150 a week over the academic year brings in €4,500 to €5,000 tax free, the house entirely yours at weekends. And because the person is a licensee rather than a tenant, there is no Residential Tenancies Board registration and the arrangement stays flexible.
Revenue clarified two points this year: rent-a-room income does not affect your Mortgage Interest Tax Credit, and the student can still claim their own Rent Tax Credit. The State is subsidising both sides.
One serious warning, because the scheme has a cliff edge: the €14,000 limit is all or nothing and includes everything — rent, bills, contributions for meals or laundry. Earn €14,001 and the entire amount becomes taxable. Count carefully and keep records.
Who should look at this? Empty nesters in Galway city, Salthill, Knocknacarra and Oranmore, obviously: rooms within reach of the university will let within days. But also homeowners along the commuter corridors: a student priced out of the city will happily take a good room in Claregalway, Athenry or Tuam where reliable public transport exists.
The crisis is real and the criticism of slow delivery is deserved. But between a strategy dated 2035 and a September dated now, thousands of Galway households hold the only stock that can move this month. If you have the room, the tax system has rarely made it easier to help and you will be well paid for helping.
Johnny Gannon is the founder of Fair Deal Property, Auctioneers & Estate Agents Galway. For advice on buying or selling call 091 394593 or visit www.fairdealproperty.ie
