Kiwis, Moving Into Your Next Flat Just Got Cheaper

More than half of New Zealanders are renters, which means a huge chunk of people know just how rough renting can be. But today we bring you good news for a change: tenants will no longer have to fork out extra cash to pay letting fees to agents and landlords. The practice will be abolished as soon as December 12.

Housing and Urban Development Minister Phil Twyford said letting fees are an “unfair” and “unjustifiable tax” with “no economic rationale”, and estimated the ban will stop the handover of up to $47 million.

"This will 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… 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," he said.

Victoria University of Wellington’s Student Association (VUWSA) rallied behind the Residential Tenancies (Prohibiting Letting Fees) Amendment Bill and put forward a collection of crowdsourced submissions.

President of VUWSA Marlon Drake told VICE getting rid of letting fees was an important step towards making tenant life easier. “Now our students will be able to plan where they live without the fear of a random fee that supposedly covers work the property manager is already being paid for,” he said. “This ban will also be a massive benefit to tenant mobility when they need to get out of a bad flatting situation.”

But not everyone is stoked. The Real Estate Institute of New Zealand (REINZ) said it had concerns about how the work covered by letting fees would be paid for once they are abolished. "Letting fees covered property inspections, advertising, viewings, background checks on tenants, liaison with landlords and processing the tenancy agreement," said REINZ chief executive Bindi Norwell. "So actually, they do quite a lot of work. So someone has got to pay for that."

National maintains that these costs will fall back on tenants through increased rent. However, when Scotland abolished letting fees in 2012, only two percent of landlords increased rent to specifically cover the banned fees.