The Ultimate Guide to Rent Increases
With increasing mortgage rates and heated housing markets across Australia, rent increases are a fact of life. It’s something that can be tricky for both tenants and landlords to wrap their heads around, particularly when the rules differ from state to territory.
In this guide, we’ll outline everything you need to know about rent increases, including the rights and obligations of both tenants and landlords.
When Can Rent Be Increased?
The frequency with which a landlord can increase the rent depends on whether it’s a fixed-term or periodic agreement and the Australian state in which you live. While periodic tenancies are considered a “month-to-month” arrangement, fixed-term tenancies have clearly defined start and end dates.
As a general rule, the rent cannot be increased during a fixed-term tenancy, unless it has been stipulated in the tenancy agreement.
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New South Wales
If you’re on a periodic tenancy in New South Wales, the rent can only be increased every 12 months and the landlord needs to provide at least 60 days' notice. The same rules apply for fixed-term tenancies of more than two years.
For fixed-term tenancies of less than two years, any price increases need to be stated and agreed to upfront. The landlord does not need to provide written notice of the increase in this situation.
If there’s no written agreement, the rent cannot be increased during the first 6 months.
More information is available at NSW Fair Trading.
Victoria
If you’re on a periodic tenancy in Victoria, the rent can only be increased every 12 months and the landlord needs to provide at least 60 days' notice.
Fixed-term tenancies of less than five years must have any rent increases stated and agreed to upfront and they can only occur every 6 months. If you’re on a fixed-term agreement of more than five years, the rent can only be increased every 12 months and the landlord must give at least 60 days' notice.
More information is available at Victorian Consumer Affairs.
Queensland
If you’re on a periodic tenancy in Queensland, the rent can only be increased every 6 months and the landlord needs to provide at least 60 days' notice.
Rents cannot be increased if you’re on a fixed-term tenancy, unless it has been stated and agreed to upfront. If rental increases have been written into an agreement, they can’t take effect sooner than 6 months after the commencement of the tenancy agreement and the date of the last increase. Landlords must also provide a separate written notice of the increase, even if it is written into the tenancy agreement.
More information is available from the QLD Government's Rental Tenancies Authority.
Western Australia
If you’re on a periodic tenancy in Western Australia, the rent can only be increased every 6 months and the landlord needs to provide at least 60 days' notice.
Rents cannot be increased if you’re on a fixed-term tenancy, unless it has been stated and agreed to upfront. If rental increases have been written into an agreement, they can’t take effect sooner than 6 months after the commencement of the tenancy agreement and the date of the last increase.
More information is available from the WA Department of Housing.
South Australia
If you’re on a periodic tenancy in South Australia, the rent can only be increased every 6 months and the landlord needs to provide at least 60 days' notice.
Rents cannot be increased if you’re on a fixed-term tenancy, unless it has been stated and agreed to upfront. If rental increases have been written into an agreement, they can’t take effect sooner than 6 months after the commencement of the tenancy agreement and the date of the last increase.
More information is available from the SA Housing Authority.
Australian Capital Territory
If you’re on a periodic tenancy in the Australian Capital Territory, the rent can only be increased every 12 months and the landlord needs to provide you with at least 8 weeks' notice. In this situation, the rent can only be increased by 10% of the Consumer Price Index.
Rents cannot be increased if you’re on a fixed-term tenancy, unless it has been stated and agreed to upfront. Once a fixed-term agreement of 12 months has ended, the landlord can increase the rent but must give at least 8 weeks' notice.
More information is available from the ACT Civil and Administrative Tribunal.
Tasmania
If you’re on a periodic tenancy in Tasmania, the landlord needs to provide you with at least 60 days' notice if they want to increase the rent.
Rents cannot be increased if you’re on a fixed-term tenancy, unless it has been stated and agreed to upfront.
More information is available from the Tasmanian Government's Consumer, Building and Occupational Services.
Northern Territory
If you’re on a periodic tenancy in the Northern Territory, the rent can only be increased every 6 months and the landlord needs to provide at least 30 days' notice.
Rents cannot be increased if you’re on a fixed-term tenancy, unless it has been stated and agreed to upfront.
More information is available from NT Consumer Affairs.
How Much Can Rent Be Increased?
As outlined above, each Australian state and territory has its own rules when it comes to the regularity of rent increases and, with the exception of the ACT, there are no rules about how much the rent can be increased. That being said, there is an expectation that landlords only increase rents by what is considered a “reasonable amount” in relation to the local market.
When considering rent increases, it’s important to take into consideration the following:
• Is the rent comparable with other properties in the area?
• How long has it been since the last rent increase?
• Are there any differences between the current and proposed tenancy agreement?
• Are there any additional services being provided by the landlord?
• What is the general condition/state of repair of the property?
• What is the value of the contents provided by the landlord?
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Telling Renters About Rent Increases
If a landlord decides to increase the rent, they must notify tenants in writing at least 60 days/30 days/8 weeks in advance (depending on the state/territory). The letter must state the new amount and the date it applies, as well as how the notification has been delivered. The following template can be used as a guide for informing tenants of rent increases.
Rent Can't Be Increased to Penalise a Renter
It’s important to be aware that rent can't be increased to penalise a renter for breaking any part of the rental agreement. If something of this nature is included in a tenancy agreement, it cannot be enforced and financial penalties can be imposed on the landlord or agent for doing so.
Changes to the Bond When Rent Increases
Depending on which state or territory you live in, the bond may be increased when the rent is increased.
New South Wales
Landlords cannot ask tenants to pay more bond when the rent is increased.
Bond lodgement forms are available here.
Victoria
The bond can only be increased for new long-term agreements of more than 5 years.
Bond lodgement forms are available here.
Queensland
The bond may be increased when the rent is increased but at least one month's written notice must be given.
Bond lodgement forms are available here.
Western Australia
The bond may be increased when the rent is increased but at least 60 days written notice must be given.
Bond lodgement forms are available here.
South Australia
The bond may be increased when the rent is increased but only after at least 2 years have passed since the original bond was lodged.
Bond lodgement forms are available here.
Australian Capital Territory
Landlords cannot ask tenants to pay more bond when the rent is increased.
Bond lodgement forms are available here.
Tasmania
Landlords cannot ask tenants to pay more bond when the rent is increased.
Bond lodgement forms are available here.
Northern Territory
The bond may be increased when the rent is increased but only after at least 2 years have passed since the original bond was lodged.
How to Negotiate a Rent Increase
If you’re not sure whether the rent increase stipulated is “reasonable”, you can look at median property prices in your area. For example, if the median price for a two-bedroom house in your suburb is $450 a week and the landlord wants to increase your rent to $570, then you may have a case to argue.
Remember, rental prices change depending on supply and demand, with a lack of supply usually resulting in price increases when power is in the hands of landlords. When there is a lack of demand, prices are more likely to stay stagnant as landlords don’t want to lose tenants altogether.
If a tenant thinks the rent increase is “unreasonable”, they have the right to negotiate with the landlord. If that fails, they can apply to their state or territory’s tribunal and they will decide if it is fair or not.
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What to Do If You Can't Afford a Rent Increase
If you can’t afford to pay a rent increase, either in the short term or the long term, it’s important that you speak to your landlord as soon as possible. If you simply don’t pay the rent, it could cause you all sorts of trouble down the track.
Notify your landlord in writing and outline why you can’t afford the rent increase and consider negotiating if there is an increase that you can afford. If they decide to go ahead with the rent increase, you may need to consider moving to a more affordable property or seek out financial assistance. There are several community organisations that offer one-off assistance to help cover housing, food and transport needs while you find a long-term solution.
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Conclusion
Rent increases are unavoidable and something that both tenants and landlords need to consider. It’s important that landlords are aware of their obligations when increasing rents and for tenants to understand their rights under state laws. If tenants feel that a rent increase is unfair or they are unable to make the increased payments, it’s essential that they communicate with their landlord and/or familiarise themselves with the legal and community services that are available to them.
