Rent Increase Rules NSW: What Landlords Can and Can't Do in 2026

NSW landlords face a significantly more regulated rental environment than they did five years ago. The 2024–2026 reform agenda to the Residential Tenancies Act 2010 has tightened rent increase rules, introduced new eviction protections, and expanded tenant rights in ways that every investment property owner needs to understand — not just property managers.

If you're raising rent on an NSW investment property in 2026, or planning to, here's what the law requires.

The Core Rule: Once Every 12 Months

From 31 October 2024, rent increases across all NSW tenancy types — fixed-term and periodic — are capped at a frequency of once per 12-month period.

Previously, fixed-term tenancies had limited restriction on how often landlords could raise rent within the lease term. That flexibility is gone. Regardless of what your tenancy agreement says, you cannot increase rent more than once in any rolling 12-month period.

This applies to:

• Residential tenancies (houses, apartments, units)
• Boarding houses
• Caravan parks and moveable dwellings

Notice Requirements

You must give at least 60 days' written notice to the tenant before any rent increase takes effect.

The notice must be in writing and must specify:

• The new rent amount
• The date the increase takes effect

Verbal notice is not sufficient. A text message or informal email may be challenged at NCAT as inadequate. The notice must be clear, written, and delivered with at least 60 days before the increase kicks in.

Limits on the Amount

NSW has not introduced a cap on the amount a rent increase can be. Unlike some other Australian states, there is no percentage limit or CPI-linking requirement built into the legislation.

However, tenants can challenge excessive increases at the NSW Civil and Administrative Tribunal (NCAT). If a tenant believes an increase is excessive, they have 30 days from receiving the notice to apply to NCAT for a review.

When NCAT assesses whether an increase is excessive, it considers:

• Market rents for comparable properties in the area
• The landlord's outgoings (rates, insurance, maintenance)
• The condition and facilities of the property

NCAT explicitly does not consider the tenant's personal financial capacity or hardship as a reason to limit the increase. The assessment is market-based, not needs-based.

In practice, rent increases that broadly track local market movements are very rarely overturned at NCAT. Increases significantly above local market rates are more vulnerable.

Fixed-Term vs. Periodic Tenancies

The once-per-12-months cap applies to both types, but the practical experience differs.

Periodic tenancies are rolling agreements with no fixed end date. You can increase rent once per year with 60 days' notice. The tenant can choose to vacate rather than accept the increase, but the increase itself is lawful as long as the frequency and notice rules are followed.

Fixed-term tenancies require a clause in the written lease agreement that explicitly states the amount of the increase or the method of calculation (for example, CPI). You cannot increase rent mid-term on a fixed-term tenancy unless the lease includes a lawful rent increase clause. Even then, the once-per-12-months cap applies.

When a fixed-term lease ends and becomes periodic, you can give notice of a new rent as long as the last increase (if any) was more than 12 months prior.

The End of No-Grounds Eviction

The rent increase rules don't operate in isolation. From 19 May 2025, NSW permanently abolished "no-grounds" terminations. Landlords can no longer end a periodic tenancy without a legally prescribed reason.

This matters for rent increases because the traditional landlord leverage — "take the increase or I'll end the lease" — no longer applies in the way it once did. If you issue a notice to end a periodic tenancy in response to a NCAT rent dispute, you need a valid ground to do so. Common valid grounds now include:

• The property is being sold with vacant possession
• Major renovations requiring vacant possession, commencing within two months of termination
• The landlord, spouse, or dependent is moving in for at least six months

There is also a six-month re-letting restriction following a landlord-initiated termination. If you evict a tenant to sell or renovate, you cannot re-list the property for rent for six months. This prevents landlords from using fabricated termination reasons to remove sitting tenants.

Bonds and Pet Rules

Related changes that affect your investment property management in 2026:

Bond cap: Maximum bond is four weeks' rent. Separate pet bonds are prohibited — you cannot charge an additional bond if you approve a pet.

Bond claims: From 1 July 2025, landlords and agents must complete a mandatory end-of-tenancy survey within 14 days of making a bond claim. Failure to complete the survey may affect claim processing.

Pet approvals: From May 2025, tenants have a presumed right to keep pets. If a tenant applies (using the approved form), you have 21 days to respond in writing. No response equals automatic approval. Grounds for refusal are limited: strata by-laws prohibiting pets, inadequate fencing, or severe property unsuitability. You cannot charge extra rent or a higher bond as a condition of approval.

What This Means for Your Investment Model

The combination of once-per-year rent increase limits, no-grounds eviction removal, and mandatory notice periods means that NSW rental income adjusts more slowly than in some other jurisdictions.

If you've underpriced a property relative to the market — perhaps after a long-term tenant relationship — you can correct this through consistent annual increases, but the process takes time. You cannot simply jump rent by 25% in one notice period without facing NCAT scrutiny.

On the positive side, Sydney's rental vacancy rate of 1.3% (as at April 2026) means strong tenant demand and relatively low void periods between tenancies. In undersupplied markets, market-rate increases are generally absorb well.

The reform environment in NSW has shifted permanently toward tenant security. Understanding these rules, and building them into your property management processes from the outset, is now part of operating any NSW residential investment.

The New South Wales Investment Property Guide covers the full tenancy framework — including eviction grounds, bond management, NCAT processes, and how to manage the transition from fixed-term to periodic tenancy efficiently.

See more New South Wales guides →