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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.

New healthy homes standards for rental properties

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

Case study

Case study

Judy's rental property

Judy owns a house in Nelson that she rents and manages herself. Over the past year, Judy installed new ceiling and underfloor insulation to meet the standards of climate zone three (which cover the South Island, Stewart Island and some of the central North Island) before the 1 July 2019 deadline. She saved receipts of the work and photos showing where the insulation was installed.

Insulation regulations(external link) — Tenancy Services

Judy has a new tenant moving in on 1 July 2019. Judy includes a separately signed statement in the new tenancy agreement of the type, location and condition of the recently installed insulation. She also includes another separately signed statement that she will meet all the healthy homes standards. Judy wants to be ready for her 1 July 2021 deadline, so she makes a plan to tackle the work to meet all the healthy homes standards by that date.

In July 2020, Judy’s tenant wants to renew the yearly lease. When Judy draws up the renewed tenancy agreement, she references the work completed to meet the healthy homes standards to date and includes all the required information. Judy has kept receipts as proof of the installation of a new fan that was put into the bathroom for ventilation, and of a heat pump that was installed into the living room. She also includes a print out of the results from the online heating assessment tool that she used to calculate the room’s required heating capacity.

Heating assessment tool(external link) — Tenancy Services

In July 2021, Judy has a new tenant moving into her rental property, which now meets all the healthy homes standards. In this new tenancy agreement, Judy records all the work that has been done to meet the healthy homes standards. She continues to keep records of past work and any future work done as ongoing maintenance on the house.

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

Do you have more questions about the healthy homes standards?

Do you have more questions about the healthy homes standards?

Contact Tenancy Services by phone at 0800 836 262 or complete an enquiry form on their website.

Tenancy enquiry form(external link) — Tenancy services

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