A rental provider (landlord) can increase the rent for their property, but there are rules about what they can do.
These rules also apply to people living in rented premises, rooming houses and caravan parks.
Note: if you rent in a residential park there are different rules for rent increases under a site agreement.
Important:
- If the rent increase rules are not followed the increase may be invalid.
- Renters can challenge a rent increase if they think it is too high.
- There are also limits on how often the rent can be increased (see below).
On this page:
Other pages have information about how to resolve a dispute, how to tell a rental provider you are going to leave a property, how to tell a renter that you want them to leave the property and what to do about late rent.
How much rent can increase
A rental provider can’t increase the rent during a fixed term agreement unless the rental agreement (lease) says this is okay. If the rental agreement allows for an increase, the agreement must state how the increase will be calculated.
The rental provider must inform the renter using a Notice of rent increase form. This form must be given to the renter at least 60 days before the increase is due to start.
The law doesn’t say exactly how much a rental provider can put the rent up by.
However, the law does require a rental provider to give their renter information about how they have calculated the rent increase.
In practice this means a rental provider must show that:
- the Notice of rent increase provides for a specific amount of rent increase, and
- the increase has been calculated in line with the method outlined in the Notice of rent increase.
The 4 most common methods for calculating a rent increase are:
However, rental providers can use other approaches if they prefer. It is important to remember that:
- Simply referring to a method in the rental agreement is not enough.
- The rent increase information in the rental agreement and in the Notice of rent increase must be sufficiently clear so the renter can work out:
- how rent increases will be calculated and
- if the increase matches what is specified in the agreement.
For example, the rental agreement may say that rent will be increased by $5 every 12 months. This means the rental provider can increase the rent by $5 per year by issuing the renter with a Notice of rent increase form.
Examples of invalid and valid wording
The following are examples of rent increase calculations included in a written rent agreement or Notice of rent increase. The examples are not exhaustive and are provided as general guidance to assist renters and rental providers.
Invalid wording (invalid increase)
- Rent increased by dollar amount.
- Based on the rental market valuation.
- As per rental provider’s instructions.
- All properties in the same building are leased between (price range).
- CPI
Valid wording
Note: these are examples only.
- The next rent increase will be an increase of $20 per week.
- The next rent increase will be a fixed increase of 2%.
- The next rent increase will be by 1.8% in line with the Consumer Price Index increase as reported by the Australian Bureau of Statistics for the September 2022 quarter.
- The next rent increase will be by $20 in line with the statewide rent increase for the June 2022 quarter.
If a rental provider relies on an estate agent to manage their rental property, the agent will also need to prepare the Notice of rent increase form correctly and will need clear instructions from the rental provider. If the agent gets it wrong they may be in breach of their Professional Conduct obligations.
If you are a renter and you think the rent increase is invalid you can request a review.
How often rent can increase
A rental provider can only increase the rent at certain times. How often depends on the type of rental agreement, and when the agreement was signed. In most cases, rent cannot be increased more than once every 12 months, even if the rental agreement specifies a rent increase before that time.
Agreements (leases) shorter than 5 years
Rental agreements that have an end date are fixed-term agreements. Most go for 5 years or less.
Rental providers can only increase the rent if the rental agreement says they can, and only as often as the rules below allow. Otherwise, they must wait until the end of the agreement.
If the agreement does say rent can be increased, there are rules about how often:
- for agreements that started before 19 June 2019, the rent can’t be increased more than once every 6 months
- for rental agreements that started on or after 19 June 2019, the rent can’t be increased more than once every 12 months
- for rental agreements for rooming houses and residential or caravan parks starting after 29 March 2021, the rent can’t be increased more than once every 12 months.
Agreements (leases) longer than 5 years
Rental agreements that have an end date are fixed-term agreements. Some go for more than 5 years – these are called long-term rental agreements. They used to be known as long-term leases.
In a long-term agreement, rent must not be increased more than once every 12 months, and only if the agreement says that the rent can be increased.
Periodic (month by month) agreements
Rental agreements that don’t have an end date are periodic rental agreements. They are often called month by month agreements. People usually start a periodic agreement when a fixed-term agreement ends – this happens automatically unless a new fixed-term agreement is signed.
In periodic agreements, there are still rules for how often the rent can be increased:
- for periodic rental agreements that started before 19 June 2019, the rent can’t be increased more than once every 6 months
- for rental agreements that became periodic on or after 19 June 2019, the rent can’t be increased more than once every 12 months.
This is true even if it has been month by month for several years. If the rental provider increases the rent, the renter can accept the increase, ask for a rent assessment or tell the rental provider they want to end the agreement and leave, known as issuing a notice of intention to vacate.
Social housing
There are special rules for the amount of rent paid by people living in social housing. If you are living in this type of housing, the rent you pay can be based on the market rate or your income. The market rate is assessed once a year and income is assessed twice a year. If they change, the amount you have to pay might change. Read more about market rent and fixed rent in social housing.
Telling renters about rent increases
Rental providers must use the Notice of rent increase form to tell renters about rent increases at least 60 days before they are going to put the rent up.
The rental provider must tell the renter:
- how much the rent will increase
- how the rental provider calculated the rent increase - if the rent is increased during a fixed term rental agreement, the rental agreement must indicate how the rent would be increased (consumer price index, rent index, percentage, or fixed dollar amount)
- what the renter can do if they think the increase is too high.
The correct form must be used
Rent can’t be increased unless the rental provider has used the right form. For rent to increase, the rental provider must use one of these forms to give the renter notice:
If the rental provider doesn’t use the right form, the notice isn’t valid. The renter only has to pay the increase if they are given proper notice.
Rent can’t be increased to penalise a renter
A rental provider can’t ask a renter to pay more rent because they have broken any part of the rental agreement. Rental agreements can’t include anything that says a renter has to pay more rent if they break any of the terms of the rental agreement.
If there is something like this in the agreement, the renter should contact us.
There are financial penalties if the rental provider includes a prohibited term like this in the agreement, and such a term can’t be enforced. Read more about penalties.
Changes to the bond when rent increases
Additional bond amounts can only be required for rent increases when there is a long-term agreement which is being renewed for another fixed term of more than 5 years.
The rental provider must give the renter 120 days written notice that they want them to ‘top up’ the bond using the Notice requesting additional bond. The renter must pay the additional bond amount within this 120 days.
The rental provider can’t do this more than once every five years.
To calculate the additional bond amount, work out the total bond that would normally have to be paid for the next five years of the rental agreement. Then subtract the bond already paid to the Residential Tenancies Bond Authority (RTBA).
The rental provider must lodge the additional bond with the RTBA within 10 business days after receiving the additional amount of bond.
The renter can apply to VCAT to either:
- change the rental agreement so that the rental provider can’t require extra bond to be paid
- change the amount of extra bond that has to be paid.
Forms you might need
To tell a renter or resident about a rent increase, use one of these forms:
Sections of the Act
If you want to know what the law says about rent increases, you can read these sections of the Residential Tenancies Act 1997:
- Section 44 – Rent increases (residential rental agreement)
- Section 101 – How much notice of rent increase is required? (rooming house)
- Section 152 – How much notice is required of rent or hiring charge increase? (caravan park)
- Section 206SA – Rent increases in site agreements (part 4A park).