Issue Date:  -  Friday, 30 June 2000

Residential rent GST free

The Ministry of Fair Trading wishes to remind tenants and owners of their rights and obligations with respect to any increase in rent.

The Commissioner for Fair Trading, Patrick Walker said that although rent on residential properties is not subject to the GST, owners may face higher costs in relation to managing their rental property.

"Although costs for owners may increase with the GST, owners are still required to comply with the Residential Tenancies Act 1987 (RTA) if they are seeking to increase the rent payable by their tenants," he said.

Section 30 of the RTA outlines that owners are obliged to provide tenants on periodic tenancies with written notice if they intend to increase rent.

The notice must specify the actual amount of the increase and the day on which the increase will take effect. In addition, at least 60 days notice must be provided.

Rents cannot be increased if it is less than 6 months since the tenancy commenced, or if it has been less than 6 months since the last increase.

With a fixed term tenancy, if there is a written clause stating that rent can be increased during the term of tenancy, then the rent can be increased before the end of the tenant's fixed term as agreed. The rent can not be increased at any other time during the tenancy.

If the tenancy is due to be renewed, all conditions can be renegotiated at that time. It is not necessary to give 60 days notice if the rent is to be renegotiated upon renewal.

Permanent residents in caravan parks are the exception to the rule and their rent will be subject to GST. However if the owner wishes to increase rent as a result of the GST, the provisions of the RTA must still be complied with.

Tenants or owners seeking advice in relation to rent and tenancy matters are encouraged to contact the Ministry of Fair Trading on 1300 30 40 54 or send Fair Trading an email on consumer@docep.wa.gov.au.

Media inquiries:
Hayley Mayne
Tel: (08) 9282 0961
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