How to increase rent legally in New Zealand

Rent increases are normal — but the process matters

Costs go up. At some point, most landlords need to increase the rent to keep the numbers working. The Residential Tenancies Act 1986 (RTA) explicitly allows this, but it sets clear rules about frequency, notice, and process. Getting any of these wrong can render the increase invalid.

How often can you increase rent?

Under section 24 of the RTA, rent can only be increased once every 12 months. The 12-month period runs from either:

• The date the tenancy started, or
• The date the last rent increase took effect

This means if you increased the rent on 1 March 2025, the earliest you can implement the next increase is 1 March 2026. You cannot increase rent more frequently, even if your costs have risen sharply or market rents have moved significantly.

The one exception is a fixed-term agreement that specifies a rent increase mechanism — the increase can take effect according to those terms, provided it still doesn't occur more than once in any 12-month period.

How much notice do you need to give?

You must give the tenant at least 60 days' written notice. The notice must be in writing, state the new rent amount, state the effective date, and be signed by the landlord or their agent.

The 60-day period is a minimum — giving less invalidates the increase. If you post the notice, allow additional time for delivery, as the 60 days starts when the tenant receives it. Tenancy Services provides a standard form that meets all the requirements.

Is there a cap on how much you can increase?

No. There is no statutory cap on rent increases in New Zealand. You can increase the rent by whatever amount you consider appropriate — $10 per week, $50 per week, or more.

However, under section 25 of the RTA, a tenant can apply to the Tenancy Tribunal for a market rent determination within 21 days of receiving the notice. The Tribunal considers comparable rents in the area, the property's size and condition, and the tenancy terms. If the proposed rent exceeds market rate, it can be reduced. In practice, Tribunal challenges are uncommon when increases are in line with the market.

How to determine the right amount

Setting the right rent increase requires a balance between keeping your investment sustainable and retaining a good tenant. Here's how to approach it:

Research the market

Check comparable properties on Trade Me Property, Homes.co.nz, and local property manager listings. Tenancy Services also publishes market rent data by region.

Factor in your costs

Calculate how rates, insurance, maintenance, and mortgage interest have changed since your last review. An increase that tracks your cost increases is easier to justify.

Consider your tenant

A reliable, long-term tenant is genuinely valuable. Vacancy costs — lost rent, advertising, cleaning — can easily exceed several weeks' rent. A moderate increase that retains a good tenant may deliver a better return than a large one that prompts them to leave.

The process, step by step

Here's a practical walkthrough of increasing rent on a periodic tenancy:

1. Check the date of the last increase (or tenancy start). Make sure at least 12 months have passed or will have passed by the time the increase takes effect.

2. Research the market and decide on the new amount. Be prepared to justify this amount if challenged.

3. Prepare the written notice. Use the Tenancy Services form or draft your own, ensuring it includes all required information.

4. Deliver the notice to the tenant. Ideally hand-deliver or email it, and keep a copy for your records. The notice must be received at least 60 days before the increase takes effect.

5. Record the increase. Update your records with the new rent amount and the effective date. If you're using a tool like keel to track your rental income, update the rent amount so your records stay accurate and you know when the next 12-month window opens.

6. Follow up. On the effective date, confirm that the tenant has adjusted their automatic payment (if applicable) to the new amount. A polite reminder a week before the increase takes effect is good practice.

Fixed-term tenancies

Rent increases during a fixed-term tenancy work slightly differently. You can only increase the rent during a fixed term if:

• The tenancy agreement includes a clause allowing for a rent increase, and
• The clause specifies the amount of the increase or the method for calculating it

If the fixed-term agreement does not include such a clause, you cannot increase the rent until the fixed term expires. Once it rolls over to a periodic tenancy (or a new fixed term is negotiated), you can then follow the standard process.

Many landlords include a rent review clause in fixed-term agreements to preserve flexibility. A typical clause might state: "The rent may be reviewed on [date], with any increase to take effect after 60 days' written notice in accordance with section 24 of the Residential Tenancies Act 1986."

What you cannot do

The RTA is clear about several restrictions:

• You cannot increase rent more than once every 12 months. No exceptions for cost increases, market movements, or any other reason.
• You cannot give less than 60 days' notice. A notice that doesn't meet the minimum timeframe is invalid.
• You cannot increase rent as retaliation. If a tenant has exercised a right under the RTA — such as requesting repairs or filing a complaint with Tenancy Services — and you respond with a rent increase, the Tribunal may view this as retaliatory and order the increase to be reversed. Section 54 of the RTA specifically addresses retaliatory actions.
• You cannot charge rent in advance beyond a limited amount. While not directly related to increases, it's worth noting that you can only require rent to be paid up to two weeks in advance under section 23 of the RTA.

Communicating the increase

How you communicate matters. Be straightforward — explain you're reviewing rent in line with market rates and your costs. Give brief context if rates or insurance have jumped. Be respectful; a rent increase is a business decision, but the tenant's home is personal. And always follow up any informal conversation with the required written notice.

Final thoughts

Increasing rent is a normal part of owning an investment property, and the process is not complicated. Give proper notice, respect the 12-month rule, set a fair amount backed by market evidence, and communicate clearly with your tenant. Most tenants understand that rents go up over time — it's how you handle the process that determines whether it's a non-event or a source of friction.