Australia’s rental reforms have become a significant talking point for property investors eager to safeguard their investments. With each state implementing unique changes, understanding these reforms is crucial for anyone with skin in the real estate game. Our comprehensive guide will help property investors like you stay informed and strategically navigate the dynamic landscape of rental regulations across Australia.
New South Wales
The Minns Labor Government is delivering on its election commitment to improve rental laws and help make renting fairer, announcing new laws to end no-grounds evictions.
This change will be the one of the biggest reforms to the NSW rental market in a decade.
Under the existing law, the owner of a rental property can choose to end a residential periodic lease at any time for any reason or no reason at all. Under the proposed reforms, homeowners will now need a reason to end a tenancy for both periodic and fixed term leases.
If the homeowner wishes to end a lease, evidence must be provided with a termination notice, with penalties payable by homeowners providing non-genuine reasons.
For those on fixed term agreements of less than 6 months, the termination notice period to tenants will be increased from 30 days to 60 days. For fixed term agreements of more than 6 months, the termination notice period will be increased from 60 days to 90 days. There will be no change to notice periods for those on periodic agreements.
More details can be found here.
Victoria
In Victoria, minimum rental standards including the cleanliness, privacy, security and amenity for rental properties and rooming houses are prescribed under the Residential Tenancies Regulations 2021 and the Residential Tenancies (Rooming House Standards) Regulations 2023 (the current Regulations), both made under the Residential Tenancies Act 1997.
In line with the Victorian Government’s commitments under the Gas Substitution Roadmap Update and the transition towards net zero emissions by 2045, additional minimum standards for rental properties and rooming houses relating to energy efficiency are proposed to ensure that renters and rooming house residents are provided with comfortable and energy efficient living arrangements. A standard for blind cord safety anchors is also proposed to increase safety in all rental properties.
The Residential Tenancies and Residential Tenancies (Rooming House Standards) Amendment (Minimum Energy Efficiency and Safety Standards) Regulations 2024 (the proposed Regulations) will prescribe minimum standards for ceiling insulation, draught-proofing, hot water systems, cooling, and the uplift of current standards for heating and shower roses in rental properties; a new heating standard for rooming houses, and a new safety standard for blind cord anchors to apply to all rental properties.
The proposed Regulations are expected to be made in October 2024.
More details can be found here.
Queensland
The Residential Tenancies and Rooming Accommodation and Other Legislation Amendment Bill 2024 was developed to broaden Queensland’s residential tenancy laws while making sure it is viable for property owners to provide housing options.
The Bill was developed around five key areas identified by the Queensland Government as priority areas for rental reforms, including
- installing modifications
- making personalisation changes
- balancing privacy and access
- amending the rental bond process
- addressing fees and charges.
New laws in effect from 6 June 2024 include:
- Rent bidding – rent bidding or accepting rent offers higher than the advertised price, are banned.
- Maximum rent in advance – a property manager/owner cannot, at the start of a new tenancy, solicit, accept or invite a tenant to pay more rent in advance that exceeds two weeks for a periodic tenancy agreement, a rooming accommodation agreement or movable dwelling tenancy agreement and one month for a fixed tenancy agreement, even if a prospective tenant makes an offer to pay more than the amount prescribed in the legislation.
- Rent increases – are limited to 12 months and are attached to the property instead of the tenancy.
- Ending tenancies – greater clarity on ending tenancies in the following situations: a short tenancy for moveable dwellings, when a community title scheme (that is, a body corporate for units or townhouses) is terminated and changes to terminology with regards to ending a tenancy due to student entitlement.
- Goods left behind – for managing parties to contact former tenants where goods are left behind and revised process of advertising stored goods.
- Domestic and family violence – amendments to terminology and expansion of confidentiality requirements.
Upcoming changes in effect from 30 September 2024 include:
- Re-letting costs – will be calculated on the remaining time on the tenancy or rooming agreement and whether the fixed term agreement is greater or less than three years. For agreements up to three years it’s the lower amount of the specified reletting costs or the rent until a new tenant/resident moves in.
- Rent payments – tenants must be offered two ways to pay rent including a way that does not incur more than usual bank costs and is reasonably available to a tenant.
- Utility bills – a tenant must receive utility bills within a four-week timeframe, otherwise the tenant does not need to pay. There are also changes to how water charges are calculated and can be charged when a tenancy begins or ends during a billing period.
- Maximum bond – no more than four weeks rent can be requested by a managing party. There will be provision in certain circumstances for tenants to request a refund of bonds paid over the maximum amount prior to these changes coming into effect.
More details can be found here.
South Australia
South Australia’s rental laws were updated on 1 July 2024 to improve protections for renters and ensure landlords can manage properties effectively.
It’s the biggest update of rental laws since they were introduced nearly 30 years ago and follows a review of the entire Residential Tenancies Act 1995.
Reforms already in place
The biggest changes commenced on 1 July 2024 when the remainder of South Australia’s reforms became operational.
The changes pertained to longer notice periods, requiring prescribed reasons to terminate a tenancy, caps on routine inspections (4 per year) and more options for tenants experiencing domestic abuse.
There are clear guidelines allowing pets in rental properties as well as minor alterations and safety modifications. Better controls exist for water and electricity billing, requirements for more efficient replacement appliances and the need to meet minimum housing standards.
Registration of designated rooming house providers also support increased protections for rooming house residents.
More details can be found here.
Western Australia
As of 29 July this year the following changes were introduced:
12 Monthly Rent Increases
- For periodic rental agreements (with no end date), the minimum 12-month time frame between rent increases will apply from 29 July 2024, regardless of when the agreement was signed.
- For fixed term rental agreements signed on or after 29 July 2024, the minimum 12-month time frame between rent increases will apply from 29 July 2024.
- For fixed term rental agreements signed before 29 July 2024, the minimum 12-month time frame between rent increases will apply once the current fixed term ends.
Pets Welcome
In most cases pets are allowed, however tenants must seek permission. Tenants will need to fill in an approved form to give to the landlord or agent.
Landlords or agents can refuse if:
- a law specifically prevents pets;
- they can prove a ‘good reason’ to the Commissioner for Consumer Protection – for example the property is not fully fenced
- A landlord can place ‘reasonable conditions’ on having a pet – for example a bird must remain in a cage, or the carpets must be professionally cleaned at the end of the tenancy.
- A landlord or agent can use the pet bond in addition to the regular bond to clean mess and fix damage a pet has caused.
Making a Home
To help make a rental feel like a home, small, personalised changes (known as minor modifications) will be allowed in most cases, however tenants must seek permission.
More details can be found here.
Tasmania
The Tasmanian government has announced a series of changes to tenancy laws to fulfil its election cycle promises.
Pets in the Home
The state government has put forward legislation to allow pets in rentals and minimise the dangers of toppling furniture.
The pet reform would represent a stark shift from the state’s current laws which stipulate that tenants are only able to keep a pet inside their house if the property’s owner has agreed, or if this condition has been included in a tenant’s lease.
As part of the government’s 2030 Strong Plan, the amended law will stipulate that owners will not be permitted to unreasonably reject applications from prospective tenants because they have a pet.
Safety Fittings
Proposed amendments to the Residential Tenancy Act, if passed, would also allow tenants to “fix potentially dangerous furniture like cabinets or TVs to walls”, on the condition that tenants are responsible for any plastering and paint touch-ups at the end of the tenancy.
The amendment follows the release of recent data from the Australian Competition and Consumer Commission which revealed that 28 people, including 17 children under five, have died in Australia from toppling furniture.
Private Rental Incentive Scheme
The Private Rental Incentive Scheme is an innovative program providing stable and affordable housing. It incentivises landlords to make their properties available at affordable rents, bringing properties into the market that otherwise would not be available to people on lower incomes.
Under this scheme, rents are capped at between 25 to 30 per cent below median rates and in return property owners receive an incentive payment, and are guaranteed rental income for a two-year lease.
Land Tax Incentives
A 100% land tax incentive for property owners who build to rent, or switch a short stay home to long term rental.
This means that for those who build to rent, land tax will be free for three years, which could save them $6,000, while those who switch a short stay to rent won’t pay land tax for a year and they will save $2,000.
More details can be found here.
In conclusion, navigating rental reforms across Australia is crucial for property investors aiming to maximise returns and maintain compliance. Staying informed about each state’s specific changes ensures that investors can effectively manage their properties, foster positive tenant relationships, and optimise their investment strategy.
At Elders, we have dedicated property management and investment experts ready to assist and answer any questions you may have. Contact one here.