Setting and reviewing rent outside a Rent Pressure Zone

Check if your property is in a Rent Pressure Zone

The rules for setting rent depend on if your property is inside or outside a Rent Pressure Zone (RPZ).

You can check if a property is located in an RPZ. If it is, different rules apply.

Find out about the rules for setting rent in an RPZ.

If your property is outside an RPZ, follow the rules below.

Rent review process

To review rent outside an RPZ you must:

• Check a rent review is allowed – rent can only be reviewed once every 24 months within a tenancy.
• Calculate the new rent – it cannot be higher than market rent.
• Complete a Notice of Rent Review – this must be served on the tenant at least 90 days before the new rent becomes payable.
• Update the tenancy register within one month of the new rent taking effect.

When a rent review is allowed

Outside of RPZs, a rent review can only take place if at least 24 months have passed since:

• The tenancy start date, or
• The date of the last valid rent review for the same tenancy. The date of service of the rent review notice is the date the rent review takes place.

If a tenancy ends, the landlord can set a new rent for a new tenancy. They do not have to wait 24 months from the date of the last rent review for the previous tenancy.

A rent review can happen more often if:

• There has been a ‘substantial change in the nature of the accommodation’; and
• The substantial change results in the market rent for the property being greater than when the rent was last set.

What counts as a ‘substantial change’?

A property qualifies as having a ‘substantial change’ if it meets one of these criteria:

• A permanent extension increasing the floor area by at least 25%.
• Work improving the Building Energy Rating (BER) by at least 7 ratings.
• Work resulting in any 3 or more of the following:
  • A permanent change to the internal layout.
  • Adaptation for use by a person with a disability.
  • A permanent increase in the number of rooms.
  • An improvement of at least 3 BER ratings (if previously D1 or lower).
  • An improvement of at least 2 BER ratings (if previously C3 or lower).

Calculating market rent

Rent outside of RPZs cannot be more than market rent. This applies when setting rent at the start of a tenancy or when reviewing rent. It applies to private tenancies and student specific accommodation. Different rules apply for setting rent for AHBs and for cost rental tenancies.

What market rent means

‘Market rent’ is the rent a willing tenant (not already living there) would pay, and a willing landlord would accept for the property, considering:

• The terms of the tenancy.
• The rental values of properties of a similar size, type and character and in the same or a comparable area.

For rent reviews, you must provide examples of rent for 3 comparable properties in the Notice of Rent Review (see below).

Completing a Notice of Rent Review

You must serve a valid Notice of Rent Review on the tenant.

• The form must follow the prescribed format exactly.
• Any changes to wording, layout or missing information may invalidate the notice.
• The notice must state the new rent amount and how it was calculated.

You can download the Notice of Rent Review form (pdf)

Comparable properties

You must include 3 comparable properties in the Notice of Rent Review. Comparable properties must:

• Have been advertised within the last 4 weeks before the notice was served.
• Be of a similar size, type and character. For example, a one-bedroom apartment cannot be compared to a 3-bedroom house.
• Be in a comparable location. This means town to town, suburban to suburban or rural to rural.

If there are no comparable properties in the immediate area, you can use properties from a similar area. For example, a 3-bed property in one rural town can be compared with a 3-bed property in another rural town.

Giving the tenant notice of new rent

You must give the tenant a minimum of 90 days’ notice before the new rent takes effect.

The Notice of Rent Review must be served at least 90 days in advance. It is recommended to allow extra days to avoid issues with the notice period.

Updating the tenancy register

Landlords must notify the RTB that the rent amount for a tenancy has changed.  You can do this through your RTB online account or by using a Tenancy Update Form.

This must be done within one month of the new rent taking effect.