The last six years have seen increases and changes to laws affecting landlords and tenants in New Zealand. With an incoming National government, there are more changes to our housing landscape on the horizon. Here’s what landlords and tenants can expect to change in 2024.
The recent change in government has come with promises of significant changes to rental laws. One of these major changes is restoring no-cause evictions. Under the previous Labour government, tenants were protected from no-cause terminations. This means that landlords had to provide a valid reason for an eviction before kicking a tenant out.
The National Party, now in power, aims to reverse this legislation with the view that the removal of no-cause termination has negatively impacted vulnerable individuals as landlords don't want to ‘take a chance’ on tenants with poor rental histories.
The change is expected to make it easier for landlords to manage their properties and remove anti-social tenants from properties. Renters should be aware that under this rule, landlords no longer require a valid reason to terminate you from a property.
National's campaign included a promise to assist renters under the age of 30 by allowing them to use their KiwiSaver savings to cover rental bonds. This policy aims to help alleviate the financial burden of paying up to four weeks' rent in advance before moving into a rental property.
The initiative will particularly benefit students and young graduates who often find it difficult to save enough money to cover the cost of very large bonds. The funds from KiwiSaver would be transferred to Tenancy Services and returned to the account at the end of the tenancy.
Renters should be aware that removing funds from their KiwiSaver could have a negative impact on their investments, especially in the short term.
Another proposed change involves reversing the automatic roll-over of fixed-term tenancies to periodic tenancies, a feature implemented under the Labour government. This adjustment aims to provide more flexibility for landlords and tenants to negotiate terms themselves rather than defaulting to a periodic arrangement.
This change is hoped to have a positive impact on the rental market as National claims that some landlords shifted away from offering short-term fixed-term agreements, opting to Air BnB their properties instead.
Tenants should be aware that if their fixed-term tenancy ends next year, it will no longer automatically roll over to a periodic lease and they will need to negotiate these terms instead.
National's campaign also pledged to reintroduce a tax break for landlords by restoring interest deductibility on rental properties. The proposed phased change would see the current deductibility of 50% maintained until April 2025, followed by an increase to 75%, and finally, full restoration a year later.
National's promises extend to reversing Labour's changes to the bright-line test, which currently requires tax payment if a house is sold within a decade. The proposed reduction to a two-year period could impact property buyers and sellers, encouraging more investment properties to be sold over the short-term and make it easier for buyers to buy and sell homes quickly with the market.
The National Party has also committed to reversing some of Labour's zoning reforms, intended to encourage more affordable housing. These changes could affect property owners' ability to build on their land and may have bigger effects for housing development and availability throughout New Zealand.
The National Party has proposed changes to notice periods for periodic tenancies. Specifically, tenants' notice period for moving is expected to be reduced from 28 days to 21 days, while landlords' notice period for selling, extensive alterations, or redevelopment of the property is set to decrease from 90 days to 42 days. These adjustments aim to strike a balance between tenants' rights and property owners' practical considerations.
Among the proposed changes, the government is considering the introduction of 'pet bonds,' allowing tenants to pay a higher bond to have an animal on the property. The introduction of a pet bond aims to increase the number of pet-friendly rentals on the market and ensure that landlords are covered by any damage to the property by a pet.
It's up to tenants to understand the rental laws and how this could impact their rental agreement. Tenants may benefit from some laws, including the ability to use their KiwiSaver to put down a bond on a property. However, other changes to rental laws may have a negative impact, such as 90-day evictions and the removal of automatic periodic tenancies. It's important to talk to your landlord before you sign a new lease to understand what type of lease you are on and how these changes may affect you in the future.
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