Quick answer: NSW’s rental reforms, phased in between late 2024 and July 2025, limit rent increases to once every 12 months, ban no-grounds evictions, and require landlords to respond to pet requests within 21 days. There is no percentage cap on how much rent can rise, but tenants can challenge excessive increases at NCAT within 30 days. For property investors, the reforms mean yield is locked in for 12-month windows, exit strategies tied to vacant possession now require genuine intent with evidence, and tenant retention has become a financial variable worth optimising.
NSW’s rental reforms change the investment arithmetic: how you price rent, how you plan an exit, and whether keeping a good tenant is worth more than chasing the market.
NSW rolled out the largest set of rental reforms in the country, with changes taking effect progressively through late 2024, 2025, and early 2026. If you own or are buying an investment property in NSW, the rulebook you learned even two years ago is now out of date.
What Changed and When
The reforms landed in three tranches. Each one changed a different piece of the landlord-tenant relationship.
Late 2024. Rent increases were capped at once every 12 months across all lease types, closing a loophole that had allowed more frequent increases on shorter fixed-term agreements. Fees that landlords used to pass to tenants (application fees, processing fees, platform charges) were banned.
May 2025. The second and largest wave. No-grounds evictions were abolished. Landlords must now provide a valid reason with evidence to end any tenancy. New pet laws took effect the same month, requiring landlords to respond to pet requests within 21 days or face automatic approval. Charging pet rent or higher bond for pets was prohibited.
July 2025. The third wave was administrative but significant. A mandatory Bond Online survey began collecting data on who ended each tenancy, why it ended, and the bond claim outcome. That data now feeds into NSW’s new rental data reporting system, giving the government visibility into eviction patterns it never had before.
| Date | What Changed |
|---|---|
| Late 2024 | Rent increases limited to once per 12 months; tenant fees banned |
| May 2025 | No-grounds evictions abolished; pet laws introduced |
| July 2025 | Mandatory Bond Online survey launched |
One Rent Increase Per Year, Every Year
The core rule is simple. Rent cannot be raised within the first 12 months of a tenancy, and landlords must wait at least 12 months between increases. That applies to both periodic agreements and fixed-term agreements.
The 12-month clock does not reset when you renew a lease or switch agreement types. If the landlord has not changed and at least one tenant remains the same, the renewal counts as the same agreement for rent increase purposes. You cannot bump the rent at renewal if it has been less than 12 months since the last increase.
There is one narrow exception. Fixed-term agreements of less than 2 years that began before 13 December 2024 follow different rules. If the agreement does not include a written rent increase clause, rent cannot be raised at all until the fixed term ends. Once it does, the standard 12-month rule applies.
Landlords must give at least 60 days written notice before any increase takes effect. The notice must state the proposed new rent amount, the date it takes effect, and be signed, dated, and properly addressed.
No Percentage Cap, but NCAT Can Step In
NSW does not impose a fixed percentage limit on rent increases. There is no statutory number you cannot exceed.
But tenants can apply to NCAT within 30 days of receiving a rent increase notice if they believe the increase is excessive. The Tribunal weighs comparable rents for similar properties in the same area, the state of repair and amenities, and the landlord’s expenses. If NCAT finds the increase excessive, it has the power to set the rent for the next 12 months.
The practical effect: a landlord who pushes an increase well above market without justification tied to comparable rents or documented cost increases is inviting a Tribunal order that locks in a lower figure for a full year. The NSW Government’s Rent Check tool lets tenants compare proposed rent against the median range in their postcode, and that data is exactly what NCAT will look at.
No More No-Grounds Evictions
From May 2025, you cannot end a tenancy without stating a reason. Landlords must provide a valid reason with evidence to end any tenancy.
The valid grounds are:
- Moving into the property yourself
- Selling the property with vacant possession
- Major renovations
- Tenant breach of the agreement
Each ground requires supporting documents. A claim that you are moving in needs evidence. A sale with vacant possession needs evidence. And some grounds carry re-letting restrictions. If you terminate a tenancy claiming you are moving in, then re-list the property for rent a month later, you are exposed. The restriction is straightforward: you cannot immediately re-advertise the property unless the stated grounds were genuine.
This changes the exit calculus for investors. In the old system, you could issue a no-grounds notice, wait out the notice period, and list the property for sale vacant. That path still exists (selling with vacant possession is a valid ground) but it now requires genuine intent and documentation. A sale that falls through after the tenant has been evicted leaves the landlord with a vacant property and a termination that may be scrutinised.
Pets, Payments, and the Day-to-Day Rules
Three operational changes that affect every landlord, every month.
Pets. Tenants can request permission to keep a pet. Landlords must respond within 21 days or the request is automatically approved. Refusal is only allowed on specific grounds, such as the property being unsuitable or strata by-laws prohibiting pets. You cannot charge additional pet rent, a higher bond, or extra pet fees.
Fees. Third-party application fees, processing fees, and platform charges can no longer be passed to tenants. At least one fee-free rent payment method, such as bank transfer, must be available. These are small line items, but they add up. A landlord who previously used a platform that charged tenants per payment now absorbs that cost or switches providers.
Bond data. From July 2025, the mandatory Bond Online survey collects data on who ended the tenancy, why, and the bond outcome. This is not just paperwork. It means every eviction is now recorded and categorised, and patterns (a landlord who repeatedly terminates tenancies to raise rent, for example) become visible to the regulator.
What Happens When a Tenant Challenges Your Rent Increase
NSW has no percentage cap on rent increases. A tenant who receives a notice they consider excessive can apply to NCAT within 30 days. The Tribunal does not ask whether the increase feels fair. It asks whether the new rent is in line with comparable rents for similar properties in the same area, accounting for the property’s condition and amenities.
That means the landlord’s best defence is data. If comparable properties in the postcode are renting for more than the proposed increase, the increase is likely to stand. If the proposed rent is significantly above the postcode median without a material change in condition or amenities, NCAT can set the rent for the next 12 months.
The NSW Government’s Rent Check tool gives tenants access to postcode median rent data. Landlords should know that data before issuing a notice, because it is the same data the Tribunal will use.
Three Ways the Reforms Change Your Investment Strategy
The reforms are not just compliance items. They change the numbers.
Yield is locked in for 12-month windows. You cannot chase the market mid-year. If rents in your suburb rise 8% three months after you set your tenant’s rent, you wait nine months before you can adjust. That makes initial pricing more important. Under-price at the start of a tenancy and you carry that number for a full year. Over-price and you risk a vacancy that costs more than the difference.
Exit strategies tied to vacant possession now require intent and evidence. If your investment thesis includes selling the property vacant within a specific timeframe, you need to plan for the notice periods and documentation requirements. A landlord who buys a property, installs a tenant, and plans to sell vacant in 18 months needs to understand that the termination must be genuine and supported. The days of issuing a no-grounds notice as a routine step in a sale process are gone.
Tenant retention is now a financial variable. The cost of vacancy, re-letting, and compliance risk now outweighs the upside of aggressive rent increases in most scenarios. A tenant paying market rent who stays for three years, with one increase per year aligned to market movement, produces more predictable income than a cycle of vacancy, re-letting costs, and Tribunal risk. Landlord insurance is worth reviewing alongside these changes, but the better strategy is avoiding the vacancy in the first place.
These changes also shift the pre-purchase analysis. An investor evaluating a property in a high-yield suburb now needs to ask different questions. What are the comparable rents in the postcode? Are rents rising or flattening? What is the vacancy rate? Is the property in an area where tenancy reforms could shift the yield calculation?
PropSpotter’s suburb research flags these variables before you buy. If you are evaluating two suburbs with similar yields but different regulatory risk profiles, that difference belongs in your investment decision. The coaching program walks investors through the compliance landscape so they enter a purchase knowing exactly what the tenancy rules will require of them, not discovering them six months later when they try to raise the rent.
FAQ
Can a landlord increase rent by more than 10% in NSW?
Yes. NSW has no fixed percentage cap on rent increases. However, tenants can challenge any increase they consider excessive at NCAT within 30 days of receiving the notice. The Tribunal compares the proposed rent against market rates for similar properties in the area and can set the rent for the next 12 months if it finds the increase excessive.
How often can rent be increased in NSW?
Once every 12 months. The clock runs from the last increase, not from the start of a new lease. Renewing or switching agreement types with the same landlord and at least one continuing tenant does not reset the 12-month period.
What happens if a tenant refuses a rent increase in NSW?
The tenant can apply to NCAT within 30 days of receiving the rent increase notice. The Tribunal will consider comparable rents, the property’s condition and amenities, and the landlord’s expenses. If NCAT finds the increase excessive, it can set a lower rent for the next 12 months.
Can a landlord evict a tenant to sell the property in NSW?
Yes, selling with vacant possession is a valid ground for termination. But the landlord must provide evidence that the sale is genuine, and some grounds carry re-letting restrictions. If the stated grounds were not genuine, the landlord cannot immediately re-advertise the property.
Are pet bonds or pet rent allowed in NSW?
No. Landlords cannot charge pet rent, a higher bond, or extra pet fees. They must respond to pet requests within 21 days or the request is automatically approved. Refusal is only permitted on specific grounds, such as property unsuitability or strata restrictions.