Rent increases

A lease (officially called a rental agreement) that includes an end date is called a ‘fixed-term’ lease. Most commonly, fixed-term leases are for an initial fixed period of 12 months.

If your lease is for a fixed term, the rent cannot be increased at all during that term, unless the lease includes a rent-increase clause, which says how or by how much the rent will be increased.

If your lease includes a rent-increase clause

Even if your lease includes a rent-increase clause, the rent still cannot be increased more often than the law allows, which is once every 12 months.

From 29 March 2021, if a new fixed-term lease includes a rent-increase clause, the lease must also state the amount of the increase – or the method that will be used to figure out the amount – and that it will not be increased by more than that amount.

If you do not agree to a rent-increase clause before you sign

A valid lease does not need to contain a rent-increase clause. It is something that some landlords (officially called rental providers) or agents may decide to include, so it is important to read the lease carefully before you sign it.

Before you sign the lease, if you do not agree to a rent-increase clause being included, you can ask for it to be removed or crossed out. If you and the landlord agree to cross out a rent-increase clause, you should all sign next to the change to show that everyone has agreed to this.

If the landlord or agent will not remove this clause, it is your decision whether to sign the lease or find a different home to rent. If you are unsure whether you want to sign the lease because of the rent increase clause, seek advice immediately. Tenants Victoria and other organisations can help. See the information on this page about how to get help.

A lease (officially called a rental agreement) that does not have an end date is ‘periodic’ (often called a month-by-month lease). Also, when a fixed-term lease ends, it automatically continues as a periodic (month-by-month) lease.

For a periodic lease that started before 19 June 2019, the rent cannot be increased more than once every 6 months.

For a periodic lease that started on or after 19 June 2019, the rent cannot be increased more than once every 12 months.

The landlord (officially called the rental provider) or agent cannot include anything in the lease (officially called the rental agreement) that makes you responsible for paying an increased amount of rent if you break any of the rules of the lease.

Any term that does this is prohibited (banned). It is an offence to include a prohibited term in a lease. To learn more, see the page on this website about leases (rental agreements).

If your lease includes a prohibited term

If you have a lease that includes a prohibited term, the landlord cannot enforce it. If the landlord refuses to remove it from your lease, you can apply to VCAT, which can order that the term does not apply. See our page on applying to VCAT.

You can also report an offence to Consumer Affairs Victoria, which can issue an infringement notice (fine) to the landlord or agent if they failed to follow the law.

The landlord (officially called the rental provider) can give you notice of a rent increase at any time, provided they give you at least 60 days written notice using the official Consumer Affairs Victoria form on the Consumer Affairs Victoria website: Notice of proposed rent increase.

The rent increase notice must not set a start date that is less than 6 or 12 months (depending on the law that applies to your agreement) since the last rent increase took effect.

The increase must also not come into effect during the fixed-term lease (officially called the rental agreement), unless the current lease specifically allows it (has a rent increase clause).

Only one increase can be listed in each rent increase notice.

The notice of proposed rent increase can be given to you:

• In person (between 8 am and 6 pm)
• By mail, or
• Electronically, if you have given consent to receive notices this way

See our page about starting a tenancy for more information on consenting to have notices sent electronically.

The rent increase notice must include:

• The amount of the rent increase
• The method used to calculate the rent increase (this is only required if the agreement commenced on or after 29 March 2021)
• Details about your right to apply to Consumer Affairs Victoria to have the proposed increase assessed, if you think it is too high
• The date the rent increase applies from

If your lease (officially called your rental agreement) began on or after 29 March 2021, when you receive a notice of rent increase it must set out a method of rent increase. While the law does not list or define what methods can and cannot be used, common methods include:

• Consumer Price Index (CPI) (see CPI on the Australian Bureau of Statistics website)
• Statewide Renting Index (see Victorian Government Melbourne and regional rental indexes)
• Comparative market review or analysis

The rent increase amount should match the relevant method of rent increase used in the notice and be clear about how the rent amount was determined.

If you receive a rent increase notice and want to challenge it, you can do your own research and give evidence to VCAT to show whether the landlord’s review is accurate and reasonable.

Some landlords have tried to argue that simply increasing rent by a set percentage or fixed amount counts as a proper method of setting rent, but VCAT has usually rejected this.

If the landlord (officially called the rental provider) or their agent does not follow these rules, you can challenge the legal validity of a rent increase notice at VCAT. See the information on this page about how to apply to VCAT if the rent increase is not valid or too high.

Note: We do not recommend you ignore a rent increase. We recommend that you pay the increase if the start date of the proposed increase has arrived, even if you want to challenge it at VCAT. This is because if VCAT later finds that the rent increase is legally valid, you will have gone into rent arrears (fallen behind in your rent), which can lead to a ‘notice to vacate’. See our pages on overdue rent and notices to vacate and eviction.

If you think the increase is too high, you should first apply to Consumer Affairs Victoria to assess it. This service is free.

You must apply in writing within 30 days of receiving the notice of an increase.

There are 2 ways to apply:

• Use the ‘Rent increase investigation’ section on the last page of the official notice of proposed rent increase that the landlord (officially called the rental provider) or agent gave you
• Use the Consumer Affairs Victoria online form: Request for rental assessment

What happens at the assessment

A Consumer Affairs Victoria inspector may contact you to arrange a visit your home, or they may do a desktop review, which does not require a visit. They will consider the condition of the property, the facilities, and any services provided, and compare the proposed rent increase with those of similar properties in the same area.

During the inspection, or if an inspector contacts you for more information, you should point out anything that supports your claim that the rent increase is excessive, such as:

• The state of repair of the property
• Problems with the location
• The rents for similar properties in your area
• Any facilities or services that you provide rather than the landlord
• Any work you have done, with the landlord’s consent or agreement
• Any change in the rent and condition of the property or facilities since the start of your lease (officially called the rental agreement) and since the last rent increase
• The number of rent increases (if any) in the last 24 months and the amount of each of those increases
• Any valuation of the property

Rent assessment report

Once the inspector has carried out an investigation, you and the landlord will receive a written report.

If the inspector’s report says that the rent increase is too high, they may try to negotiate a fairer rent with the landlord. You can also do this yourself – see the information on this page about how to negotiate with the landlord.

Even if the inspector’s report says the rent increase is not too high, you can still negotiate directly with the landlord, and you can still apply to VCAT to argue that the rent increase is too high. However, it will be more difficult to succeed at VCAT without this report, or if this report says the increase is not too high.

It is worth trying to negotiate with the landlord (officially called the rental provider) about the rent increase.

If you have a Consumer Affairs Victoria rent assessment report that says the increase is too high, or you have a report from a real estate agent about rents in the area, or have done your own research, you can also use this to try to negotiate. If you do come to an agreement, put it in writing, make sure you both sign it and keep a copy.

If the landlord will not agree to reduce the amount of the rent increase, you can apply to VCAT for an order that the increase not be allowed. You must attach a copy of your Consumer Affairs Victoria report, if you have one. See the information on this page about how to apply to VCAT if the rent increase is not valid or too high.

When deciding whether a rent increase notice is legally valid, VCAT will check:

• If the notice was in the correct form
• If it was given to you the right way
• If it gave you at least 60 days notice before the rent increase takes effect
• Whether the landlord (officially called the rental provider) used a recognised and lawful method to calculate the rent increase (if applicable)
• Whether the notice correctly states the amount of rent you currently pay and, if based on the chosen method (when applicable), accurately states the increased amount

If you do not have a Consumer Affairs Victoria rent assessment report, or you did not request one on time, VCAT will first decide whether you had a reasonable excuse for not getting a report or for the delay in asking for one.

Since VCAT might not accept your reasons, and this could mean your rent goes up under a legally valid notice, we strongly recommended you request the report and do so on time.

When looking at whether the rent increase is too high, VCAT will consider:

• If the proposed increase would make your rent more than it is for similar properties in the area
• Comparable residential properties with similar construction, size, rooms and facilities
• The state of repair of the property
• What costs and charges you pay and what the landlord (officially called the rental provider) pays for things such as electricity and other utilities
• Any facilities or services that you provide rather than the landlord
• Any work you have done, with the landlord’s consent or agreement
• Any change in the rent and condition of the property or facilities since the start of your lease (officially called the rental agreement) and since the last rent increase
• The number of rent increases (if any) in the last 24 months and the amount of each of those increases
• Any valuation of the property

To apply to VCAT, fill out VCAT’s general application form.

You can complete the form online, or download a PDF and fill it in electronically or print it and complete it by hand. If you want a hard copy form posted to you, call VCAT on 1300 018 228.

When you get to the heading ‘What orders do you want VCAT to make?’, write:

• Section 452 in the box if you are challenging the validity of the notice
• Section 46 in the box if you are challenging the amount of the rent increase

For section 46 applications, you should attach a copy of the Consumer Affairs Victoria rent assessment report, if you have one. If you do not have a rent assessment report, you should list the reasons why you were unable to obtain a rent assessment report. See the information on this page about what happens at the assessment. It lists the sorts of factors that you can include on your application form or use as evidence at the hearing where VCAT determines whether the proposed rent increase is excessive.

For more information, see our page on applying to VCAT.

If the start date of the rent increase has arrived, you should pay the extra amount, even if you are going to challenge it.

If you do not pay the proposed increase, and VCAT later decides that the increase is valid and/or not too high, you may end up in ‘rent arrears’ (overdue in your rent payments), which can lead to a ‘notice to vacate’. See our pages on overdue rent and notices to vacate and eviction.

If you are considering ending your lease (officially called your rental agreement) because of the increase, we recommend you seek advice first. Tenants Victoria and other organisations can help. See the information on this page about how to get help. See also our page on ending or breaking your lease. You can also consider Tenants Victoria’s free financial counselling service.

VCAT will let you know the time, date and place of the hearing.

At VCAT, the people who hear and decide cases are called members. A VCAT member listens to each side, reviews any evidence and resolves the dispute, either at the end of the hearing or in writing later.

It is best that you go to the hearing to tell your side of the story. If you don’t go, you run the risk of not having your side heard, or your application may be dismissed. While you may feel stressed about the hearing, VCAT is less formal than a court and Tenants Victoria and other organisations can help. If you need advice or support, this page has information on how you can get help.

At the hearing:

• If VCAT finds the notice is invalid, it will order that the rent increase cannot go ahead, and the landlord (officially called the rental provider) will need to issue a new notice to restart the process
• If you have already paid extra rent under an invalid notice, VCAT may also order a refund of any overpaid amount
• If VCAT finds the notice is valid, and you are also challenging the increase as excessive, VCAT will then decide whether the amount of the increase is excessive or not
• If VCAT decides the rent increase is excessive and sets the rent to a lower amount or refuses to allow the increase, make sure you ask VCAT to order the landlord to refund any rent that you have overpaid
• If VCAT decides that the amount of the rent increase is fair, and you want to stay at the property, you need to pay the increase from the start date listed on the original notice, if you have not done so already

If you need support to respond to a rent increase, help is available.

There are step-by-step guides, self-help tools and other resources to assist you with rent increases.

The Residential Tenancies Act 1997 is Victoria’s main law for renting. It describes the rights and duties of renters and landlords in numbered sections.

The sections in this list relate to rent increases in private rentals. Click on a link to see more about the section. Note: Depending on whether your lease was signed before 2021 (or before 2019), certain sections may not apply.

• Section 44 – Rent increases
• Section 45 – Renter may complain to CAV about excessive rent
• Section 46 – Application to VCAT about excessive rent
• Section 47 – What can VCAT order?
• Section 48 – VCAT can order refund of rent
• Section 452 – General applications to the Tribunal
• Section 506 – Service of documents

The Residential Tenancies Regulations 2021 provide more detail and definitions, and specify updates to the Residential Tenancies Act.