Increasing rent is one of the most common sources of concern that can strain the relationship between landlords/property managers and tenants.
Property investors, especially mum-and-dad ones, should be extra cautious when deciding whether to increase rents, as each state has its own guidelines when it comes to rent hikes. Here are the rules surrounding rent increases in each state and territory:
Disclaimer: The rules are subject to change depending on circumstances in each state/territory. The guidelines stated below are effective as of September 2023
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New South Wales
There are several instances when landlords can introduce rent increases for rental properties in New South Wales.
For tenancies with a fixed term of less than two years, landlords can only increase rent if the increased amount or how the hike will be calculated is set out in the agreement.
According to NSW Fair Trading, the terms in the agreement must be clear and should spell out the amount of the increase or the exact method of calculating the increase (e.g. a dollar amount or %). Conditions should not include “in line with the market” or “by the rate of inflation”.
Under this, the landlord or agent will not be required to give the tenant a written notice of the increase.
For fixed-term tenancies of over two years, rents can only be increased once in a 12-month period. Landlords need to give tenants a written notice at least 60 days before the rent is increased.
Meanwhile, a tenant can give 21 days written notice and vacate before the rent increase kicks in.
If the tenancy agreement doesn't specify a fixed term, or if the fixed-term period of the agreement has expired and it has transitioned into a continuing (periodic) tenancy, then the landlord can typically only increase the rent once in a 12-month period.
This means that within any 12-month period, the landlord can implement one rent increase for tenants on periodic leases.
No written agreement
If the tenancy is without an agreement, a landlord will not be able to increase the rent during the first six months.
Excessive rent increases can be reported to the NSW Civil Administrative Tribunal (NCAT).
During a fixed-term lease, rent cannot be raised by the rental provider unless the lease explicitly permits it and outlines the calculation method for the increase.
In such cases, the rental provider is required to provide written notice to the tenant at least 60 days before implementing the rent hike.
It is important to note that the current policy does not exactly indicate how much a rental provider can increase rents by.
However, if the lease allows a rent increase during its fixed term, it must specify how this will be calculated, or if a fixed amount, the increase must not be greater than the amount set out in the lease.
Tenants can challenge an excessive increase with the Victorian Civil and Administrative Tribunal (VCAT) within 30 days after it has taken effect.
As of 1 July 2023, rent increase frequency is set to once every 12 months for all existing tenancies.
Rent can only be raised if at least 12 months have passed since the tenant began paying the current rent amount. Any more frequent rent increase clauses established in tenancy agreements before July 1, 2023, are no longer applicable.
For instance, if a tenancy agreement was signed before 1 July 2023 that includes a special term increasing the rent after the said date, it will only be valid if it has been at least 12 months since the current rent took effect.
For fixed-term agreements, rent cannot be increased during fixed terms unless stated in the agreement. The agreement must also specify that rents will increase and how much the increase will be or how it will be calculated. Landlords in Queensland must give the tenant at least two months in writing and the increase should occur at least six months since the tenancy started or since the last increase.
The property manager or landlord also must give the tenant separate written notice of the rent increase - it will not automatically come into effect just because it’s in the agreement. The written notice must include the increased amount and the day it takes effect.
The above rule also applies to periodic agreements, or for tenancies that go past the fixed term.
For new agreements after a fixed-term one, the landlord and tenant can agree to a rent increase provided that the last hike is at least six months prior. A notice will not be required in this arrangement.
The Queensland Civil and Administrative Tribunal (QCAT) serves as the deciding body for disputes on excessive rents.
Policies relating to rent increases depend on the type of tenancy.
Under this type of tenancy, rent increases can only occur every six months and landlords must be given at least 60 days notice in writing, with details of the amount of the increase and the day it will take effect.
In a fixed-term tenancy, rent can only be raised if the written agreement clearly outlines the amount of the increase or the method for calculating it, such as a percentage.
If an increase is allowed, it cannot occur within the first six months of the tenancy or within six months of the last increase. The lessor must provide a minimum of 60 days' notice before the increase takes effect.
Tenants can apply to the state’s Magistrates Court for the rent to be changed if they deem it excessive.
Tenants in South Australia need to be notified in writing of any rent increases 60 days prior to the actual implementation.
Typically, rent can be increased once 12 months have passed since the last rent increase or since the beginning of the agreement.
For fixed term agreements, a condition allowing for a rent increase must be included in the agreement. This provision should outline the method for calculating the increase.
Furthermore, the landlord must provide written notice at least 60 days in advance of the increase, and the rent hike cannot take effect until 12 months have elapsed since the commencement of the agreement or the last rent increase.
There's no limit to how much rent can be increased, however, tenants can reach out to the South Australian Civil & Administrative Tribunal (SACAT), which handles tenant issues regarding excessive rent.
In Tasmania, rent can only be increased if there is a written lease that allows for rent increases or if the lease is not in writing.
To increase the rent, the landlord must provide written notice to the tenant at least 60 days before the new rent amount takes effect. This notice must include the specific amount of the new rent and the date on which the new rent will commence.
The regulations concerning rent increases aim to provide tenants with stability in their rental obligations for at least a 12-month period.
Consequently, in most scenarios, rent cannot be raised during an existing lease. Instead, it can only be increased at the beginning of the lease or at lease renewal or extension.
If the lease duration exceeds 12 months, rent can be increased after the initial 12 months.
For a lease of less than 12 months, rent can only be increased at least 12 months after the tenancy started, even after the lease is extended or renewed.
Tenants can file a dispute against an excessive increase with the Residential Tenancy Commissioner (RTC) within 60 days of implementation.
Residential rental laws in the Northern Territory only require 30 days of written notice for rental increases, and it needs to clearly state the amount of increase and when the hike begins.
Property owners can only raise rent payments at least six months after the start of the tenancy, with subsequent increases permitted once every six months. For fixed-term leases, the stipulations for the increases must be specified in the rental agreement.
The Northern Territory Civil and Administrative Tribunal (NTCAT) is tasked with reviewing and acting on any tenant complaints regarding rent increases.
Australian Capital Territory
Landlords in the ACT are required to give eight weeks’ notice to tenants of any increases in rent, which can only be done once every 12 months on a periodic lease. However, under fixed-term agreements, rent hikes are not allowed unless the amount is specified in the contract.
For the rent increase, the prescribed amount is determined using the rental component of the Consumer Price Index (CPI) for Canberra.
In practical terms, this means that a landlord can raise the rent on a property by an additional 10% on top of the CPI increase.
Tenants who believe that they have been handed an excessive increase can write to the ACT Civil and Administrative Tribunal (ACAT) to apply for a review.