2 year rule Rent Pressure Zone

JJJackal

Good morning boarders,

Been reading a few posts here re exemption from RPZ rules if house has not been rented in the last 2 years.

Some other posts suggest it is only if the house was not rented in the 2 years prior to the RPZ being introduced.

I do not have an example to give; just curious. What are peoples thoughts?

Browney7

JJJackal wrote: »

Good morning boarders,

Been reading a few posts here re exemption from RPZ rules if house has not been rented in the last 2 years.

Some other posts suggest it is only if the house was not rented in the 2 years prior to the RPZ being introduced.

I do not have an example to give; just curious. What are peoples thoughts?

It's your second point.

I recall IRES REIT (or another fund perhaps) did issue rent reviews above 4% for a new property where the first tenancy started after the imposition of the RPZ rules but then revised down to 4% after some backlash and probably not wanting to get politicians backs up even more.

JJJackal

Browney7 wrote: »

It's your second point.

I recall IRES REIT (or another fund perhaps) did issue rent reviews above 4% for a new property where the first tenancy started after the imposition of the RPZ rules but then revised down to 4% after some backlash and probably not wanting to get politicians backs up even more.

We were looking at buying a house recently, currently rented at 1700 (prob 800 below market rent) - EA said we could rent it for 2500 in 2 years (not that we would plan to rent it)

JJJackal

Not all properties in Rent Pressure Zones are covered by the 4% annual rental restriction. Properties exempt include those that :

Are new to the rental market and have not been let at any time in the previous two years, and
Have undergone a substantial change.
For more information about the substantial change exeption in Rent Pressure Zone areas please read our guide.

From the RTB website - think it needs to be clearer

Fian

The RPZ website is misleading.

The legislation is clear.

A 2 year break does not mean the property can be relet at market rent anymore than leaving it 2 (or 4 or 6) years between rent reviews. Why would it - why would they legislate like this? to try to reduce supply?

However if a property was not let in the 2 years prior to the RPZ coming in it is not subject to the controls, even after it has been let. That is why the REIT referred to above initially proposed to increase by >4% per annum, they backed down due to political and media pressure, not because they had a legal obligation to do so.

the reason for this exception was not to discourage new supply coming to the market by imposing price controls on it.

JJJackal

I assumed the purpose of the 2 year exemption was to facilitate an owner who moved into their rental property for 2 years and then wanted to rent it out again or a buyer who bought a property that had been previously let, moved in and then decided to let as they were moving to a new property.

Even at lower rents leaving a property vacant for 2 years to up the rent doesn't sound like a great idea - could take several years at a higher rent (if ever) to make up the loss of not renting for the 2 years

Ray Palmer

I get people are saying that a property that has not been rented for 2 years is still restricted to the rent from 2 years ago. While I can see that is how it could be read it doesn't make any sense.
There has to be a point where the property not being rented means that the RPZ rules don't apply to the rent it had at some point in the past.
The argument is how long that would be. If you are saying 2 years is not long enough what do you think is? 10 years?

The other thing is you would be restricting current owners with the things done by the previous own forever more. I can assure you that is not legal under our constitution.

2 years is very reasonable but really a year is fair.