New Tenancy Rules from March 2026
Key Changes and Strategic Considerations for Small Landlords
Significant changes to residential tenancy law will take effect on 1 March 2026, bringing new obligations for small landlords, defined as those with three or fewer tenancies. While the measures aim to promote security and transparency for tenants, they also introduce new constraints that landlords should evaluate carefully. Now is the ideal time for property owners to review their long-term plans and assess how these reforms may impact their investment strategy.
Six-Year Minimum Tenancy
Under the new framework, all new and renewed tenancies must run for a minimum of six years. This marks a substantial shift, particularly for landlords who may need to retain flexibility over their property in the short to medium term.
Restrictions on Terminating a Tenancy
The reforms remove the ability to terminate a tenancy without cause during the six-year term. Termination will only be permitted in cases such as tenant breach, verified landlord hardship, or where a close family member of the landlord requires the property. If a landlord wants to sell the property within the 6 years, the property must be sold with the tenant in situ.
Changes to Rent Review Rules
During the six-year tenancy, rent may only be reviewed once every 12 months. Increases will be limited to the lower of the Consumer Price Index (CPI) or 2%, with a minimum of 90 days’ notice required using the Residential Tenancies Board’s official notice form.
Newly built apartments and student accommodation commenced on or after 10 June 2025 are exempt from the 2% cap and may follow CPI-linked increases.
Rent Reset After Six Years
At the end of the six-year term, landlords may reset the rent to market levels, but only in specific circumstances, including voluntary tenant departure or tenant breach. Small landlords may also end the tenancy at that point for reasons such as sale, renovation, or redevelopment.
What Landlords Should Be Doing Now:
1. Review Long-Term Plans for Each Property
Landlords should evaluate whether they realistically foresee retaining the property for the full six-year period. If plans include selling, personal use, or redevelopment within that window, it may be prudent to consider options before the new rules take effect.
2. Assess Whether to Sell in the Current Market
Given ongoing housing supply shortages, the sales market remains relatively strong. For landlords who are already contemplating exiting the rental market, the period before March 2026 may offer greater flexibility than waiting until after the new regulations are in place.
3. Audit Current Rents and Projected Income
Understanding where your property sits relative to current market rents—and how the CPI/ two percent cap could affect future income—is essential for long-term planning. This is particularly important for landlords with rising maintenance or mortgage costs.
4. Evaluate the Property’s Long-Term Viability as a Rental
Consider whether the property will continue to meet your financial and strategic objectives under stricter rent controls and longer minimum tenancies. For some landlords, retaining the property may remain attractive; for others, divestment may be more aligned with their goals.
5. Prepare for Compliance Requirements
The new regime will require precise documentation and formal adherence to notice procedures. Ensuring that record-keeping systems and rent review calculations are robust will help avoid disputes or invalid notices in future.
Conclusion
The upcoming changes represent one of the most significant shifts in tenancy regulation in recent years. For small landlords, the key is to prepare early. Reviewing your property plans, assessing income projections, and considering whether to retain or sell before March 2026 will help ensure that your decisions are made from a position of strategic clarity rather than regulatory constraint.