Healthy Homes Standards and Rent Increases NZ: Can You Charge More After Compliance?

Private rentals covered by New Zealand's Healthy Homes Standards must meet requirements for heating, insulation, ventilation, draught stopping, and moisture ingress. Landlords who spent thousands on insulation, heating, ventilation, and moisture management naturally ask whether they can pass those costs on as a rent increase.

The answer has a catch that most landlords miss.

Mandatory Compliance Is Not a "Substantial Improvement"

Section 28 of the Residential Tenancies Act 1986 allows out-of-cycle rent increases (within the normal 12-month interval) when the landlord has made substantial improvements to the property. Routine maintenance and work required to meet existing legal standards do not qualify as a substantial improvement under Section 28.

Bringing a property up to Healthy Homes compliance isn't an improvement under Section 28 — it's meeting a statutory obligation. Installing the required heat pump or underfloor insulation doesn't count as a substantial improvement any more than fixing a leaking roof does. You can't use Section 28 to increase rent mid-term on the basis of Healthy Homes work.

You Can Still Increase Rent — Through the Normal Process

Healthy Homes compliance costs don't unlock a special rent increase pathway, but they don't prevent you from using the standard one either. Under Section 24, you can increase rent once every 12 months with 60 days' written notice. The amount is your choice — there's no cap — as long as it doesn't substantially exceed market rent.

In practice, a property that meets Healthy Homes Standards is more attractive to tenants and may command higher market rent than a non-compliant property. The MBIE Market Rent tool reflects this indirectly: as compliance becomes universal, the rental market lifts, and median rents in your suburb account for the standard that compliant properties meet.

So while you can't cite Healthy Homes work as a specific justification for a higher rent at the Tenancy Tribunal, a compliant property that benchmarks well against local comparables is a strong position.

What Counts as a Substantial Improvement

If your Healthy Homes work went beyond the minimum standard — say, installing a central heating system when only a single heat pump was required, or adding a full bathroom ventilation upgrade that exceeds the extraction-rate threshold — the excess work may qualify as a substantial improvement under Section 28.

Section 28 covers substantial property improvements, improved facilities or services, and agreed changes to tenancy terms that benefit the tenant. The increase must be agreed in writing by the tenant or ordered by the Tenancy Tribunal. And crucially, a Section 28 increase doesn't reset the 12-month clock for your next standard annual increase.

The Practical Approach

Most landlords fold their Healthy Homes costs into the next annual rent review. If your last increase took effect 10 months ago and you've just spent $5,000 on insulation and a heat pump, wait for the 12-month anniversary, complete Form T190 at a market-appropriate figure, and let the improved property justify the amount through comparable evidence rather than trying to claim a mid-term adjustment.

This avoids any dispute about whether the work qualifies under Section 28 and keeps the process simple.

The NZ Rent Increases guide walks through the standard annual process and the Section 28 exception side by side, with a decision tree for when out-of-cycle increases are — and aren't — available.

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