LEGISLATION

Rent increases

The gist of the legislation

You can increase the rent every 12 months, with a few exceptions to this.

The important parts, at a glance

We’ve picked out the key parts of the legislation and made them as easy as possible to read and understand.

If you'd like to read the full legislation, click here >

1.

If your tenant is in a periodic tenancy, you can increase the rent every 12 months, but not more frequently.

2.

You can’t increase the rent during the fixed term. The exception to this is if it is outlined in the agreement including by how much. Otherwise, you’ll have to wait until the fixed term is finished and/or renegotiate a new agreement with higher rent.

3.

If you increase the rent, it is considered acceptable if it is not ‘excessive’. This means that it is not more than the ‘prescribed amount’ outlined in the legislation. The prescribed amount is 110% of the percentage increase in the rents component of the housing group of the Consumer Price Index (CPI) for Canberra.

4.

Rent increase example:

  • Last date of rental increase: June 2018
  • CPI report for rents component for Canberra for June 2018: 104.0
  • CPI report for rents component for Canberra for June 2019: 107.3
  • 107.3 – 104.0 = 3.3.
  • 3.3 / 104.0 = 3.17%
  • 3.17+ (3.17/10) = 3.49%.

Therefore, the prescribed amount is an increase of 3.49%.

So if the rent was $500 per week, you can increase by 3.49%, $17.45

5.

You can increase the rent by more than the prescribed amount if:

  1. The residential tenancy agreement permits you to increase the rent by the amount
  2. The tenant agrees in writing to the increase
  3. You obtain the approval of the ACT Civil and Administrative Tribunal

6.

If you do increase the rent you have to give eight weeks’ notice of the increase in writing. The notice must state the amount of the proposed increase and if it’s over CPI, that must be disclosed. It should also include that if the tenant does not agree to the increase, you will need approval from the Tribunal to make the proposed increase.

  1. Negotiate where possible to find an outcome that works for both yourself and the tenant. It costs money every time a tenant vacates and if you have a good, long term tenant, a dispute that results in them leaving will cost you more than you’d earn through a slight increase.  
  1. Stick to CPI and the market as a guide for your rent increases. If you increase the rent excessively, and the tenant takes you to tribunal, the tribunal will rule in the tenant’s favour.  
  1. Listen to and take your Property Managers advice. It's their job to provide guidance on what you should and can increase the rent by. They’ll make recommendations that will ensure you get maximum returns, and the tenant remains happy and in your property.