The coalition deals between National, NZ First and ACT included a range of changes the new government plans to make to the rental market. 

We’ve broken down what they are and spoke to rental and landlord advocates about how they think these changes will impact renters.

There are four changes in the coalition deal focussed on the rental market and landlords, they are:

  • Allowing landlords to give 90-day eviction notices without providing a reason
  • Reducing the amount of notice a tenant has to give to leave a tenancy to 21 days, and to 42 days for landlords if they intend to move into the property or sell it.
  • Introducing a “pet bond”, where landlords can allow pets if tenants pay an additional bond to cover potential pet-related damages.
  • Increasing mortgage interest deductibility on rental properties to 100% by 2025/26.

National organiser for tenant advocacy organisation Renters United Éimhín O'Shea said while some of these policies on their face might seem good for renters, he believes all of these policies ultimately empower landlords and disenfranchise renters.

“I’ve tried to do a generous reading of these policies, but quite genuinely, there is nothing here that is good for renters. 

“I have nothing nice to say about it.”

New Zealand Property Investors Federation (NZPIF) president Sue Harrison said these changes are necessary to keep landlords in the rental market.

“I think it will help ease the supply issues and stem the flow of properties leaving the rental marketplace.

“It’s a very good start in finding the right balance between landlords and tenants and changing the things that have done the most damage - but it’s just a start.”

19-year-old Upper Hutt renter Cerveza, who didn’t want his last name used, says the policies feel like “they are prioritising landlords”.

“A lot of this, shortening notices and being able to kick people out easier, it doesn’t seem like [the new government] has the people’s best interests in mind.”

“No-cause evictions”

In 2020, the Labour government amended the law so that when landlords gave a 90-day eviction notice they had to give a reason to the tenants.

The amendment had a list of justifiable reasons for the eviction, such as anti-social behaviour and consistently paying rent late.

The new government plans to remove this amendment, allowing landlords to provide tenants with a 90-day eviction notice without giving them a reason.

Renters United’s O'Shea calls these “no-cause evictions”, while Harrison from the NZPIF said no one is ever evicted without a cause, and that this policy is best described as “no-cause stated evictions”.

O’Shea said this policy change is the “biggest problem for renters” of these coalition agreements, as it creates the largest imbalance of power between landlords and tenants.

For example, he said tenants may now feel like they can’t ask for changes to their property or negotiate rent increases for fear that this may result in an eviction, and the landlord would never have to tell them that was the reason - or give any reason at all.

He also feared it would increase the number of evictions based on discrimination, as landlords could easily hide their motivations for evictions.

In the runup to the election, National MP Chris Bishop said re-introducing no-cause evictions was “pro-tenant”, as it would make landlords more likely to take a risk on renting to people if they knew they could easily be removed if they felt it wasn’t working out.

Harrison said an example of this would be a tenant with a prison record, who under the current laws “you wouldn’t [offer a tenancy]”.

“Landlords have to take extreme care of properties and allowing someone in whose new partner might be a drug addict, this gives some tools in the toolbox,” she said.

“When you don't have to state the cause, you don't have to say ‘I’m seeing a lot of damage from this drug-fuelled addiction’.”

Reduced notice

Currently, if a tenant intends to leave their tenancy they need to give four weeks’ notice, and landlords have to give three months’ notice if they need tenants to leave a property because they intend to move into it or sell it.

The coalition deal will reduce these notice periods to 21 days for tenants, and 42 days for landlords - a reduction of 7 days for tenants, and 48 days for landlords.

Harrison said this change allows both groups more flexibility in changing their housing situations.

“That is good for renters, as if they want to upgrade or move areas it can save them a week's rent.”

She said landlords will always try to give tenants as much notice as possible when they need to move into or sell a property, but this change allows them to make changes on a shorter time frame when necessary.

O'Shea said the difference in time period reductions doesn’t take into consideration the differences between a tenant’s ability to find a new property, and a landlord’s ability to fill a tenancy.

“We’re in a housing crisis so the market is so unevenly weighted right now.

“It’s a lot easier for a landlord to find a new tenant in 21 days than a renter to find a new property in 42.”

He said this is particularly true for people with accessibility needs, or families who need to stay in the same school district.

“These are people's lives we are talking about - making it easier to uproot people is not good.”

Pet bonds

While the rest of the tenancy law changes the new government intend to make are repeals of Labour’s changes, one new law in the coalition deal is the introduction of a “pet bond”.

Currently tenants are required to pay four weeks’ rent as a bond. This money can be used to cover the cost of repairs for any damage done to a property during the tenancy.

This “pet bond” would give the options for tenants and landlords to negotiate a larger sum for this bond to allow pets inside a rental and cover any damages caused by the pet.

This was a policy proposed by ACT, with the intention of increasing the number of rental properties where people could have pets.

O'Shea said while giving more renters the ability to have pets is a good thing, charging them more to do so is not.

“Any damage an animal causes is already covered by the bond,” he says.

“Pets can do damage, but it is unlikely to be more than four weeks' rent.”

However, Harrison said in her experience pets can cause more damage than a bond can cover.

“If you imagine, and I’ve had this happen, a cat has peed through the carpet into the floorboards - even replacing the carpet won’t get rid of that smell.”

“The cost of that damage can be incredibly high, and on top of the tenants' damage.”

Harrison said this pet bond option will make pets more negotiable for landlords, rather than a “flat-out no” as is often the case now.

However, she expected the number of properties that would allow pets because of this change would still be relatively low.

Mortgage interest deductions

Previous to 2020, landlords were able to claim back any interest they paid as part of the mortgage on rental properties.

Labour had reduced the amount that could be claimed back over the past couple of years, with plans to remove this scheme completely by 2025.

Currently, landlords can claim back 50% of the interest they pay on rental property mortgages. 

The new government intends to raise this to 60% next year, 80% the following year, and back to 100% in 2025.

When the National Party co-leader Nicola Willis announced this policy in the lead up to the election, she pointed to rising rents as a consequence of removing interest deductibility and said this policy was leading to fewer rental properties in the market.

Harrison thought this policy change would encourage more landlords into the market, creating competition and possibly stabilising the rate of rent increases.

“If there is plenty to rent, that is great for renters and competition in the marketplace will keep investors on their toes.”

However, O'Shea said this policy is a taxpayer subsidy of landlords' costs that tenants will not benefit from.

“The idea that it is going to stabilise or lower rents is ridiculous. No one is going to sacrifice surplus profit just to be nice - but that's the yarn being spun.”

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