2025 law changes; what they mean for you as a Landlord
As your property managers, we stay on top of all legislative changes so you don’t have to - but as a property owner, it’s important to be aware of what’s ahead. Here’s a quick update on key tenancy and tax changes taking effect this year. For a more detailed breakdown, visit the official Tenancy Services website: www.tenancy.govt.nz/law-changes or feel free to get in touch with your Barfoot & Thompson Property Manager.
Tenancy Law Changes:
From 30 January 2025
-
90-day ‘no cause’ termination returns - Landlords can now end a periodic tenancy with 90 days’ notice, without needing to provide a specific reason or go to the Tenancy Tribunal. This gives you more flexibility - for example, if you want to place the property on the market for sale or undertake renovations after the tenants have vacated, or if you have difficult tenants.
-
Shorter notice periods - If you need to end a periodic tenancy because you or a family member is moving in, or because the property is sold unconditionally and the purchaser requires vacant possession, the required notice is now 42 days (previously 90). Tenants can also now end a periodic tenancy with 21 days’ notice (previously 28).
-
Fixed-term tenancies - Landlords can now end a fixed-term tenancy at the end of its term without requiring a specific reason, restoring flexibility for property owners. Notice will need to be given to the tenants between 90 and 21 days before the fixed-term expiry date.
-
Transitional period for fixed-term tenancies - If a fixed-term tenancy is set to end before 30 April 2025, the previous laws still apply, meaning a valid reason is needed to end the tenancy. After this date, the new termination rules take full effect.
From 20 March 2025
- Smoking rules clarified - Landlords can prohibit smoking inside rental properties.
- Family violence provisions - Tenants needing to exit a tenancy due to family violence now have clearer legal protections and processes.
Later in 2025 (date to be confirmed)
- Pet bonds and consent rules - Landlords will be able to charge a pet bond of up to two weeks’ rent and set conditions for keeping pets (e.g. professional cleaning requirements). However, landlords must have reasonable grounds to refuse a pet request. For example, if pets are prohibited under the Body Corporate rules applying to an apartment.
Property Tax Changes:
Effective 1 April 2025
- 100% tax deductibility restored – Landlords will once again be able to claim full interest deductions on loans for residential rental properties, a reversal of previous restrictions.
- Bright-line test reduced to two years – The test period is shortening from 10 years to 2 years, meaning property sales will only be subject to capital gains tax if sold within two years of purchase.
- Commercial building depreciation removed – The ability to claim depreciation on commercial buildings is being removed.
Please note: If you own a residential investment property, understanding the changes to interest deductibility and the bright-line test is essential. We recommend speaking with your tax advisor or accountant for specific advice. You can also find more details on the Inland Revenue website: www.ird.govt.nz. Plus of course, we’re always here. If you have any questions, feel free to get in touch with your Barfoot & Thompson Property Manager.
