Propertyscouts New Plymouth

Letting fees to go - 23rd Mar 2018

Letting fees to go

Government moves to ban letting fees may not benefit tenants as much as they think, industry experts say.

Housing Minister Phil Twyford today introduced legislation into Parliament which will ban the charging of letting fees to tenants.

Twyford, who describes letting fees as an “unjustifiable tax on renters”, says the move could make a real difference to struggling families.

There are significant costs associated with moving to a new rental property, which many families are now forced to do every year, he says.

“When moving into a new rental property, tenants can face up to four weeks’ bond, two weeks’ rent in advance – and one weeks’ rent as a letting fee – in addition to moving costs.

“Banning the charging of letting fees to tenants is a good first step in improving the life of renters, while we continue our broader review of the Residential Tenancies Act.”

Twyford doesn’t believe rents will rise in response to the ban – and neither does the NZ Property Investors Federation.

NZPIF executive officer Andrew King says an increase in rents in response to the ban seems unlikely but that they are, none the less, opposed to the ban.

“We believe tenants should have the flexibility to choose whether or not they pay letting fees, as they do now.

“That because when rental properties are in short supply being willing to pay a letting fee can give tenants access to more properties and put them ahead of the pack.”

King says the potential impact of the ban, including cost savings, is hard to quantify.

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