There is not a limit on how much the rental provider can increase your rent, but the rental provider must give you sufficient information about how they calculated the rent increase. If they do not, the rent increase will not be valid.
Rental providers may use various methods to explain how they have calculated a rent increase. The most common methods are:
- Consumer Price Index (CPI),
- comparative market review,
- increase by a fixed percentage,
- increase by a fixed dollar amount.
Consumer Price Index (CPI)
If your rental provider has used the Consumer Price Index (CPI) to calculate your rent increase, the notice needs to have the correct percentage increase based on the CPI for the relevant time period. The amount that your rental provider has increased the rent as a dollar figure should correspond with the CPI increase included on the notice.
You can check that your rental provider has used the correct CPI on the Australian Bureau of Statistics website.
For example:
- valid wording on a notice: “The rent increase will be by 0.6% in line with the Consumer Price Index increase as reported by the Australian Bureau of Statistics for the December 2023 quarter.
- invalid wording on a notice: “Consumer Price Index”
Comparative market review
If your rental provider has used comparative rental properties to calculate your rent increase, the notice must include information or documentation of the properties used in the comparison. This information should include similar rental properties in your area, their condition, key features and the rent amount. This can be attached to the notice, but it must be given with the notice, not afterwards.
For example, if the notice contains a description and documentation of similar properties, including the location, key features and/or rental amounts, this is likely to be enough information.
But if the notice simply stated, “market review” without giving any further information or documentation about the properties used to determine the new rent, this would be unlikely to be enough information for the notice to be valid.
Increase by a fixed percentage
If your rental provider has used a fixed percentage to calculate your rent increase, the notice needs to contain the specific percentage increase, and outline the process or steps used to calculate that percentage amount.
For example:
- valid wording on a notice: “The rent increase will be a fixed increase of 3%”
- invalid wording on a notice: “Rent increased by a fixed percentage”
Increase by a fixed dollar amount
If your rental provider has used a fixed dollar amount to calculate your rent increase, the notice needs to contain the specific dollar amount of the increase, and outline the process or steps used to calculate that amount.
For example:
- valid wording on a notice: “Rent increased by a fixed dollar amount – $30/week in line with the Victorian median rent increase for March 2024 quarter as reported by the Victorian Government Rental Report.”
- invalid wording on a notice: “Rent increased by a fixed dollar amount – $20/week”
A rental provider can use a different method to the above, however they are still required to give you sufficient information about how they have calculated the rent increase.
If you think your rental provider has not provided sufficient information, the proposed rent increase may not be valid.
