The coalition government’s 2024 rental policy announcements have now largely come into force. Aimed at boosting rental supply, encouraging investment, and creating more flexibility for landlords and tenants, these policies have reshaped the rental landscape. Some measures are already active, while others remain in discussion. Here’s an overview of what has changed and how it’s affecting the market.
Mortgage Interest Deductibility Restored to 100 Percent
The reinstatement of mortgage interest deductibility is now complete. Landlords can again claim 100 percent of the interest on loans for residential rental properties as a tax deduction.
This fully reverses the previous government’s removal of deductibility, which had increased holding costs for many landlords. The change has helped to ease financial pressure, particularly for investors with highly leveraged properties, and is expected to support more stable rental supply.
However, the rental loss ring-fencing rules still apply, meaning landlords cannot offset property losses against other personal income.
No Cause Evictions Now Reinstated
The ability for landlords to issue no cause evictions has now been reinstated. Landlords can give a 90-day notice to end a periodic tenancy without needing to provide a specific reason.
This rule was removed under the previous government but has now been restored to give landlords greater control over property management decisions. Supporters see this as a practical measure that encourages landlords to stay in the market, while tenant advocates continue to express concern about reduced security of tenure.
For landlords, this reinstatement provides a valuable safety net when a tenancy isn’t working out, or when flexibility is needed for personal or investment reasons.
Shorter Notice Periods Now in Place
Notice periods for ending tenancies have also been shortened, giving both landlords and tenants greater flexibility.
- Tenants now need to give 21 days’ notice to end a periodic tenancy.
- Landlords can give 42 days’ notice when selling a property with vacant possession or when moving into the home themselves.
For no cause terminations, the required notice remains 90 days. These adjustments aim to make tenancy transitions smoother and faster. For landlords, shorter timeframes help minimise vacancy periods when a property needs to be sold or reoccupied. For tenants, it makes moving between properties more manageable.
Pet Bond Policy Now Law and Taking Effect From December
The pet bond policy has now been confirmed and will take effect from 1 December 2025. This allows landlords to request a larger bond from tenants who wish to keep pets, helping to make pet-friendly rentals more accessible while offering landlords financial protection against potential damage.
This change is expected to open new opportunities for pet-owning tenants and give landlords greater confidence to consider pets in their properties, especially in areas where demand for pet-friendly housing is high.
KiwiSaver for Rental Bonds Still Under Consideration
The government’s proposal to let people under 30 use their KiwiSaver funds to pay rental bonds remains under consideration. The idea aims to help younger tenants overcome the upfront cost barrier when securing a rental.
While the policy has been discussed, it has not yet been implemented. No formal process or timeline has been released, so tenants cannot currently access KiwiSaver for this purpose.
If introduced, the policy could make it easier for young renters to secure properties while also broadening the tenant pool for landlords.
What these Changes Mean for Landlords and Investors
The government’s rental reforms are intended to create a more balanced and active market. Restoring tax deductibility and shortening notice periods have already improved landlord confidence and encouraged investment stability.
For landlords, the key effects include:
- Improved cash flow through full interest deductibility.
- Greater control over property use through reinstated no cause terminations.
- Faster transitions between tenancies due to shorter notice periods.
- New opportunities to accommodate pet owners safely once the pet bond policy takes effect.
For tenants, the combination of flexibility and accessibility aims to reduce barriers while maintaining property standards.
While these reforms have generally been welcomed by landlords, it remains important to stay compliant with the Healthy Homes Standards and other existing regulations, which have not changed.
Conclusion
The government’s 2024–2025 rental policy changes have reshaped the property market landscape. Most of the announced measures are now active, delivering more certainty and financial relief for landlords. Others, such as the KiwiSaver bond proposal, remain in development.
For landlords and investors, this is a good time to review property strategies, update agreements, and ensure compliance with the new tenancy settings. Working closely with your property manager will help you stay informed, prepared, and well-positioned as the market continues to evolve.
