How Much Can a Landlord Increase Rent?

April 5, 2022
increase rent

Paying rent is a necessary pain that comes with being an adult, but how much is too much? If you’re hearing about rental prices going up across Australia, you may be wondering: how much can a landlord increase rent?  

A landlord has the power to increase the rent of their property, but there are certain rules and regulations in place to keep them from disadvantageous tenants. 

According to the law, a rental provider is not allowed to raise the rent during a fixed term agreement unless the lease permits it. In this scenario, though, the agreement must also have a clause dedicated to how the increase will be calculated.  

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Reasonable rent increase

It may be difficult to determine if your landlord is taking advantage of you or not. To find out what a reasonable rent increase is, you can look at comparable properties to see what they charge in rent. If your rent is significantly lower than the median, your landlord may feel justified to increase it.  

Looking at the overall rental market of an area is what is referred to as the comparative market. Unfortunately, an increase is usually influenced by supply and demand, the availability of a substitute, and the comparative market. Each of these factors affects if a landlord decides to raise the rent or not.    

Because what is considered “reasonable” changes on a case-by-case basis, it comes down to your particular area and landlord. Typically, if there is going to be an increase, it is usually raised by 2% – 10%. It is also important to keep track of nationwide and local trends to find if a rental increase is on the horizon. 

How often can my landlord increase rent?

increase rent

Rather than simply asking ‘how much can a landlord increase rent,’ considering just how often it can be increased is important as well. Depending on where you live, rent can potentially be increased every six months, so researching your state’s rental laws can serve you well in the long run. The notice required differs from state to state as well. 

Generally speaking, an increase in rent cannot be done during the tenancy unless it is stated in the agreement or lease. If a landlord is looking to increase the rent, it will typically occur at the end of a lease or before a new one is signed. 

There are instances where landlords are given the power to increase the rent during a fixed term, however, this has to be explicitly stated in the agreement from the very beginning to be considered legal.   

How to negotiate rent

If you are up for the bargaining, negotiating with your landlord can be extremely helpful. This negotiation will have to happen only when a rent increase is proposed, though. It requires substantial preparation and knowledge of the law so that you are not taken advantage of. 

When negotiating, it is important that you have evidence prepared and remain calm and composed while presenting arguments. There are a few steps that should be taken before going into a negotiation session. 

Firstly, you must be aware of what is happening in your local rental market

From there, you can provide links to other properties that are being advertised in order to justify why you think the rent increase proposed is not fair. 

Then, you should weigh the pros and cons of either moving or staying depending on your landlord’s flexibility

If all else fails, you can negotiate a decreased price or offer to sign a longer lease in order to satisfy them.   

What to do if the rent increase is unreasonable? 

If the question of ‘how much can a landlord increase rent’ is still plaguing your mind even after negotiations, then you can take it up with your property manager or someone higher up. Paying more money for something that you are already getting can be frustrating and unfair. 

When considering your situation, though, you must look at all the factors for why a rent increase is being proposed in the first place before refuting it. 

An unreasonable increase in rent can be illegal at times, so knowing your rights, as well as your agreement, can be incredibly beneficial. On the other hand, if there is an economic crisis, your local area is changing with the tides, or if there is a viable reason for an increase, you will have to consider your options.   

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Rental laws by state

New South Wales:

Rent can be increased once in a 12-month period only if a 60-day written notice is given to the tenant. 

Queensland:

Rent can be increased if the landlord gives the tenant a minimum of 2 months’ notice in writing only if it has been at least 6 months since the last increase.

Northern Territory:

Rent can be increased if the right to do so has been written into the agreement, which must state the amount of the increase or how it will be calculated. At least 30 days’ notice in writing is required. 

Western Australia:

Rent can be increased once every six months after a 60 days’ notice is given to the tenant. 

South Australia:

There is no specified limit to the amount by which a landlord can increase rent. 

Victoria:

Rent can be increased once every 12 months, and during a fixed-term rental agreement, the amount or how the increase will be calculated must be included in the rental agreement. 

Australian Capital Territory:

Rent can be increased by ten percent more than the increase that can be found in the Consumer Price Index.

Tasmania:

Rent can be increased if given 60 days’ written notice, which must highlight the amount of the increase and when it will take effect. A rent increase can only occur once every 12 months. 

So what if my rent increases?

Rent increases may occur, but it is your right to challenge or dispute if your landlord is not abiding by the law or lease. With the knowledge of what is allowed, you can gauge whether your increased rent is justified or not. When the question of ‘how much can a landlord increase rent’ comes up, you will know the exact answer.  

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