Rental properties: New laws now in effect
New healthy homes standards became law on 1 July. Check what’s required and what you need to do next.
What you need to know
What: New minimum standards for rental properties to improve heating, insulation, ventilation and drainage, reduce moisture and stop draughts. Check out our recent newsletter article for an overview of the specific requirements.
When: New requirements come into effect in stages from 1 July 2019 to 1 July 2024.
Who: Rental property landlords, owners and managers.
Why: To make rental homes warmer, drier and healthier for tenants.
What you need to do: Make sure you meet the requirements by the following dates.
From 1 July 2019
- Ceiling and underfloor insulation is required in all rental homes where it's reasonably practicable, ie feasible, to install.
- Landlords must include a separately signed statement with each tenancy agreement that they will meet, or already meet, the healthy homes standards. This applies to any new, varied or renewed agreement. This statement is in addition to the existing requirement to include a separately signed insulation statement. Tenancy Services has guidance about tenancy agreements and statements on their site. They also offer templates you can use to get it done.Tenancy agreements (external link) — Tenancy Services
- Landlords must begin keeping records that show compliance with any healthy homes standards that apply, or will apply, during the tenancy. Records can include:
- a Building Code compliance certificate
- documents (eg receipts, reports or certificates), photographs and video recordings of professional work, evaluations or inspections that have been done
- product manuals and/or other manufacturer’s information for installed products, eg heat pump.
Keeping records (external link) — Tenancy Services
From 1 July 2020
Landlords must include a statement in the tenancy agreement of their current level of compliance with each of the healthy homes standards. This applies to any new or renewed tenancy agreement.
From 1 July 2021
Private landlords must ensure their rental properties meet the healthy homes standards within 90 days of any new, or renewed, tenancy agreement. All boarding houses must meet all the healthy homes standards as well.
From 1 July 2023
All Housing New Zealand and registered Community Housing Provider houses must meet all the healthy homes standards.
From 1 July 2024
All rental homes must meet all the healthy homes standards. This means any work done or products purchased to meet the new standards needs to be completed by
1 July 2024.
Healthy homes (external link) — Tenancy Services
Tax implications: What can you claim?
When tax time rolls around, you might be able to claim some of the money you spent on making sure your rental property meets the healthy homes standards. But there are a few things to consider first.
Topping up old, worn-out insulation could be regarded as a deductible expense. But putting in new insulation for the first time or installing a new heat pump, when there wasn’t one there before, could be regarded as a property improvement. That would make it a capital expense, which means you can’t deduct it from your rental income.
Inland Revenue has more information about managing your rental property and guidance about what you can and can’t claim at tax time. The difference between repairs and improvement can be tricky and it’s important to get it right, so it may be helpful to chat to a tax agent if you’re unsure about your specific situation.
Managing a rental property (external link) — Inland Revenue
What expenses you can claim and can’t claim (external link) — Inland Revenue