Property manager


A change in government signals impending modifications for both tenants and landlords. The newly elected National-led coalition has outlined several adjustments that will impact the dynamics of rental agreements. While these alterations have been met with approval from investors, representatives of tenants are expressing dissatisfaction.

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One significant change on the horizon is the reinstatement of 90-day ‘no-cause evictions.’ Previously altered in 2020, the law had prohibited landlords from terminating a tenancy without providing a reason, as long as they gave a 90-day notice. The upcoming adjustment means landlords will once again have the option to ask tenants to vacate without specifying a reason, as long as they adhere to the notice period.

Sarina Gibbon, the general manager of the Auckland Property Investors Association, highlighted the 2019 survey by the NZ Property Investors Federation, indicating that only 3% of tenants received a 90-day notice annually. She described it as an “insurance policy” for landlords, offering peace of mind in case issues arise during a tenancy.

Tenant advocates, such as Geordie Rogers from Renters United, expressed concerns about the lack of transparency in no-cause evictions. Rogers emphasized the need for a more open dialogue to understand why landlords may need to terminate a tenancy without cause.

Another change involves reducing notice periods. The government plans to decrease tenants’ required notice period for the end of a periodic tenancy from 28 days to 21. Additionally, the time landlords must give for selling, renovating, redeveloping, or moving into a property will decrease from 90 days to 42.

The Act Party’s proposal for pet bonds, allowing landlords to request extra rent to cover potential pet-related damages, is also under consideration. Gibbon welcomed the move, emphasizing the potential for landlords to be more accommodating to tenants with pets. However, Rogers argued against the necessity of a pet bond, stating that existing legislation already addresses the issue.

Investors will regain the ability to deduct home loan interest costs from rental income for tax purposes. This change is perceived as a significant development, with some suggesting it could influence investors’ decisions to hold onto or acquire more rental properties.

The bright-line test, determining the time investors must retain a property to avoid capital gains tax, is set to revert to two years from the previous ten years. While this adjustment is seen as a positive change for investors, its impact is considered more marginal compared to the reinstated mortgage interest deductibility.