The last six years have seen changes to laws affecting landlords and tenants in New Zealand. With the Coalition government, there are more changes to come that will affect us all. Here is what landlords and tenants can expect to change in 2024.
Restoring no-cause evictions
One of these changes is restoring no-cause evictions. Under the previous Labour government, tenants were protected from no-cause terminations. The Coalition government has proposed a return to a 90 day no cause termination with a view that landlords who would not take a chance on tenants with poor rental histories, would now be able to, knowing that it will be easier to remove problem tenants that are not a good fit for their property.
Under 30's using KiwiSaver for rental bonds
The National parties campaign promised 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 funds from KiwiSaver would be transferred to Tenancy Services and returned to the account at the end of the tenancy.
Ending automatic rollover of fixed term tenancies
This change would reverse the automatic rollover of fixed-term tenancies to periodic tenancies. This adjustment aims to provide more flexibility for landlords and tenants to negotiate terms themselves rather than defaulting to a periodic arrangement.
It is hoped this will have a positive impact on the rental market as some landlords shifted away from offering short-term fixed-term agreements, opting to Air BnB their properties instead.
Restoring interest deductibility on rental properties
From the IRD website:
From 1 April 2024, you can claim 80% of the interest incurred for funds borrowed for residential property. This is regardless of when the property was acquired or when the loan was drawn down.
From 1 April 2025 interest deductibility will be fully restored, and you will be able to claim 100% of the interest incurred.
Reversing changes to the bright-line test
From the IRD website:
If you sell a property on or after 1 July 2024 the bright-line property rule will only apply if the property is sold within 2 years of purchasing it. Generally, the bright-line property rule does no apply if you sell your main home.
Changes to notice periods for periodic tenancies
There are proposed changes to notice periods for periodic tenancies. A tenants' notice period to vacate is expected to be reduced from 28 days to 21 days, while landlords' notice period for selling, extensive alterations, or redevelopment of the property will decrease from 90 days to 42 days.
Introduction of 'pet bonds'
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.
Property Management Taranaki
If you’re looking for a professional property manager in Taranaki, the team at McDonald Real Estate can help. Our property managers know the local market inside out, as well as the latest in property law and tenant expectations.
The benefits of working with us include:
- Short vacancy periods
- Quality tenants
- Legislation expertise
- A network of contractors
- Negotiation skills
- Accurate rental appraisals
- A proven record of low arrears
To find out how much your investment property is worth in the local market, contact us to request a free assessment. We’ll determine a realistic rental yield to help you decide your next steps.
