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Changes to NSW Rental Laws in 2025: What Landlords and Tenants Need to Know

Changes to NSW Rental Laws in 2025: What Landlords and Tenants Need to Know

Feb 3, 2025 | Investment Property, Property Market

If you’re a tenant or landlord in NSW, you may already know that big changes are coming to rental laws in 2025 – and some were already put in place late last year. These reforms aim to make renting fairer, providing tenants with more security whilst providing landlords with clear guidelines to follow.

In October 2024, the NSW Parliament passed the Residential Tenancies Amendment Act 2024, which introduced significant updates to how rental agreements will work – but we’ve done the hard work of reading through the act and picked out the bits you need to know:

What has already changed (from October 31, 2024)

  1. No more extra fees at the start of a tenancy
    Tenants can no longer be charged fees for background checks or preparing tenancy agreements.
  2. Rent increases limited to once per year
    Previously this rule only applied to periodic leases and fixed-term leases longer than two years. Now all rental agreements, regardless of length or type, can only have one rent increase per year.

What changes will be made to rental laws in 2025

  1. Ending ‘no grounds’ evictions
    Landlords will now require a valid reason to terminate a lease, whether it’s a periodic or fixed term. Landlords must provide evidence with termination notices to support their claims, with penalties applying if the given reason is not genuine.

    Acceptable reasons include:

    1. The property is being sold
    2. Major repairs or renovations require the home to be vacant
    3. The landlord or their family intends to move in
    4. The tenant has breached their lease agreement
  1. More notice required for fixed-term leases ending
    Tenants will now receive more time to find a new home at the end of their lease. Minimum required notice periods are now:

    1. 60 days notice for leases of six months or less
    2. 90 days notice for leases longer than six months
  2. Easier rules for keeping pets
    Tenants will have a clearer and fairer process for keeping pets in rental properties, with key changes including:

    1. Tenants can apply to keep a pet and landlords can only refuse for specific reasons
    2. Landlords must respond to pet requests within 21 days, or a pet is automatically approved
    3. Landlords cannot increase rent or require extra bond as a condition of allowing a pet
    4. Strata by-laws that ban all pets will now be invalid under the new rules
  3. Free and convenient ways to pay rent
    Landlords and agents must offer tenants at least one electronic payment method, such as bank transfer or BPAY, without extra fees. Tenants cannot be forced to use a specific payment service or app that charges fees unless they agree to it.
  1. Water efficiency requirements (from 23 March 2025)
    If landlords want to charge tenants for water usage, properties must meet stricter water efficiency standards. The main change is that toilets must be dual flush with at least a 3-star WELS rating, in addition to existing water-saving requirements

How will these changes be enforced?

To ensure compliance to the new laws, NSW Fair Trading has set up a new Rental Taskforce with dedicated inspectors and compliance officers. Any landlord who fails to follow the new laws can be reported and may face penalties.

How can I keep up with changes to rental laws?

With rental laws evolving, it’s important you keep up with the changes – particularly if you are a landlord. The easiest way is to sign up for the NSW Fair Trading Property Matters Newsletter or visiting the Rental Commissioner Website.

Thinking about investing in property? We can help

If you’re thinking about investing in property, our team are here to help. Together we’ll look at all the potential options, develop a strategy, secure finance and help you achieve your goals. Contact us today to get started.

Everything you need to know about buying off the plan and securing finance

Everything you need to know about buying off the plan and securing finance

Aug 1, 2023 | Investment Property, Purchase, Self Menage Super Fund (SMSF)

There are many different ways to purchase property – and one of those ways actually involves committing to purchasing a property that doesn’t yet exist.

Buying real estate ‘off the plan’ means committing to purchasing a property that is still in the pre-construction or early construction phase, often long before a building or development project is completed. Many home owners and investors see buying off the plan as a good way to purchase a brand new property, however, just as with any investment, there are pros and cons to consider – so let’s have a look at them.

The benefits of purchasing property off the plan

  • Lower Purchase Price
    One of the main attractions of buying off the plan is the potential to secure the property at a lower price than it would be once construction is finished. Developers often offer discounts and incentives to early buyers which can result in significant savings.
  • Potential Capital Appreciation
    In a rising property marketing, purchasing off the plan can be a smart investment strategy. As property values will likely increase during the construction period, buyers may benefit from capital appreciation ever before they’ve settled on the property.
  • Customisation Opportunities
    This benefit particularly applies to home owners, but also provides investors with opportunities to boost their potential rental income. Purchasing off the plan often gives you the chance to customise certain aspects of the property, including selecting finishes, materials or layout preferences to suit their specific needs and tastes.
  • Delayed Payment
    When purchasing off the plan, buyers typically pay a deposit upfront and the rest of the purchase price upon completion. This extended settlement period provides you with extra time to save or secure finance.
  • Stamp Duty Savings
    As Stamp Duty is only payable on the land for off the plan purchases, you could be savings thousands of dollars on your purchase.
  • Deposit Options
    Whilst most buyers pay cash to secure their deposit, purchasing off the plan provides you with other more flexible deposit options to consider, including Bank Guarantees and Deposit Bonds. It’s always best to check with your property consultant as to what method of payment the develop is happy to accept.
  • Tax Advantages
    Being a new property, investors can claim depreciation which is a major tax incentive. This helps to reduce the ongoing costs of holding the property, allowing you to build a larger portfolio.

The disadvantages of purchasing property off the plan

  • Uncertainty
    One of the things that potentially buyers are often afraid of is the uncertainty of buying off the plan. As the property is yet to be constructed, buyers have to rely on floor plans, artist impressions and development promises as they’re not yet able to see the final product.
  • Construction Delays and Risks
    Construction projects can face unexpected delays due to various factors, such as weather, planning permits, development applications or financial issues. These delays may result in buyers having to wait longer for the property’s construction, impacting their plans.
  • Market Fluctuations
    Whilst a rising property market can bring capital appreciation, a declining market can have the opposite effect. If property values drop during the construction period, buyers may find themselves with a property worth less than they originally paid.
  • Changes in Financial Circumstances
    A buyer’s financial situation may change between time of purchase and completion, as well as general economic circumstances. This can make it harder to secure financing or meet the financial requirements during settlement.

How can you mitigate risk and increase your chances of securing finance for your off the plan purchase?

As mentioned above, economic or personal circumstances may change between the time of purchase and completion, however, below is what we always recommend our clients do to ensure they can reduce risk and have the best chance of securing finance for their property:

  • Increase your savings
    This will help to cover any unlikely shortfalls
  • Do not apply for any lines of credit during this time
    Don’t be tempted by credit card offers and avoid signing up for any additional lines of credit whilst waiting for your property to be completed. This could impact your borrowing capacity or credit rating.
  • Ensure all commitments are paid on time and up to date
    No lender likes to see late or outstanding payments, so make sure you’re paying all commitments on time.
  • Don’t change employment
    Some lenders can have issues with short term employment so it’s important that you chat to us should your employment change.
  • Maintain or reduce your living expenses
    Increasing your lifestyle costs may reduce your borrowing capacity so it’s important to keep an eye on your budget.

What should you consider when purchasing off the plan?

We’ve talked about the pros and cons, but what things do you need to consider when purchasing off the plan?

  • Research the developer
    You want to make sure that you thoroughly research the developer’s reputation, track record and completed projects prior to committing to an off-the-plan purchase as this will give you an idea of their creditability and their quality of work.
  • Understand the Contract
    Ensure you carefully review the purchase contract with the help of a legal professional. Pay close attention to clauses regarding potential changes in the property’s design, timeline and provisions for compensation in case of construction delays.
  • Finances
    It’s important that you know what you assess your financial situation and consider the risks associated with the investment before committing. When working with Sanford Finance, we’ll sit down to work out your goals, discuss potential risks and action plans and discuss contingency plans in case of unforeseen circumstances to ensure you’re not jumping into anything you’re not prepared for.
  • Location and Market Analysis
    Think about the location of the development and its potential for future growth. Consider things like the demand for similar properties in the area and evaluate the long term investment potential for the property.

What finance options are available during the construction phase?

Purchasing a property off the plan can be quite stressful and challenge even the best laid plans, however, our construction loans take a lot of stress out of the equation.

A construction loan most commonly has a progressive drawdown where you receive instalments of the loan at various stages of construction, rather than receive it all at once at the start.

This means that you generally only pay interest on the amount that is drawn down, as opposed to the entire loan amount.

A number of lenders also offer construction loans that are interest-only during the construction period, later reverting to a standard principal and interest loan once the build is complete.

Construction Loan Case Study:

Craig and Belinda are purchasing land for $300,000 in Adelaide and building a new home for $400,000 for a total value of $700,000. They are borrowing 95% or $665,000. Assuming an interest rate of 5.95%, the repayments required by Craig and Belinda during the build phase will look like this:

Current Loan Current Loan Current Loan Min. Monthly Repayment Required
Land Loan Nil $265,000 $1,314 IO
Deposit 5% $20,000 $285,000 $1,413 IO
Base 15% $60,000 $345,000 $1,710 IO
Frame 20% $80,000 $425,000 $2,107 IO
Enclosed 25% $100,000 $525,000 $2,603 IO
Fixing 20% $80,000 $605,000 $2,999 IO
Practical Completion 15% $60,000 $665,000 $3,966 P&I
Totals $400,000 $665,000  
IO = Interest Only P&I = Principal and Interest

In the above table we can see that the repayments steadily increase over time and are interest-only during the build phase. Once the final payment is made, a construction loan will generally convert to Principal and Interest repayments.

How do you get started?

Buying off the plan can be exciting and nerve wracking all at the same time, but we’re here to help. We’ve helped many clients secure their dream property or investment property off the plan and know what you should be looking for, what lenders are looking for and are here to help you navigate the off-the-plan market more confidently.

Ready to get started? Contact us today!

Evaluating the property market in Australia: Is now the time to buy or sell?

Evaluating the property market in Australia: Is now the time to buy or sell?

Jun 1, 2023 | Property Market

The decision to buy or sell property is always a tricky one, as it’s a significant financial step that involves careful consideration of various factors – including market conditions.

Whilst it’s important to know that real estate markets can be unpredictable, understanding the key indicators can help you to make an informed decision. So, let’s look at the factors influencing the Australian property market.

  • Low Listing Numbers = Increased Competition for Buyers

With decade-low listing numbers, there’s not a lot of competition in the market for vendors – but competition is fierce for buyers as they battle it out to secure a property. This is one of the reasons that selling conditions have strengthened, as evidenced by above average clearance rates, faster selling time and less negotiation.

The total number of homes listed for sale across Australia is currently 28% below usual (as reported by CoreLogic). When these volumes are low, selling conditions strengthen, meaning that potential vendors thinking about selling may jump in now rather than waiting until the traditional spring period where activity surges and there’s a spike in competition.

  • Rising Prices

Home values for Sydney, Melbourne, Brisbane and Perth all recorded an increase in housing values from the lows recorded in February. A mid-month update based on CoreLogic Australia’s daily Home Value Index showed the upswing gathering momentum, especially in cities such as Brisbane where the index is up 1.0% over the past four weeks whilst the Sydney property market still remains the strongest.. Considering housing affordability measures remain stretched such a strong rate of growth is surprising, with many experts predicting that this price rise will not be sustainable in the long term.

  • Low Supply vs High Demand

As mentioned above, decade-low listing numbers and high demand has lead to fierce competition between buyers – as seen in auction clearance rates that have been holding at 70% or higher in recent weeks.

In a time where the market traditionally tends to cool off, the stats suggest that, if anything, the market is gathering momentum instead of slowing down. Strong clearance rates as well as faster selling times and reduced discounting rates indicate that it’s definitely a vendor’s market.

Recent data from the National Housing Finance and Investment Corporation shows a 115,000 dwelling undersupply for 2028.

  • Interest Rates Continue to Rise

The biggest challenge for potential and current property owners? Interest rates. With interest rates continuing to rise, demonstrating an ability to service a loan remains one of the biggest challenges for prospective buyers to face.

Interest rates are high, but assessment levels are three percentage points higher again – making it even harder for buyers to enter the market or secure their dream property.

  • Economic Uncertainty

In addition to rising interest rates, we’re also in the midst of a cost of living crisis where consumer confidence is low.

Should RBA cut interest rates, there’s a good change we would see a pick-up in both buyer and seller activity. It’s also highly likely that lower interest rates would be the catalyst for a further uptick in housing values, however, we’re not expecting a rate cut anytime soon and there’s speculation that rates may continue to rise this year.

Economists are split on their forecasts with predictions for further rate hikes, stability and some cuts later this year – all contributing to uncertainty and low consumer confidence levels.

  • A Helping Hand

Government policies and regulations play a crucial role in shaping the property market. Policies related to taxation, lending practices, and housing affordability can have both direct and indirect effects on the market.

At the moment, first home buyers in particular have a wide variety of grants, concessions and schemes available to them (outlined in our First Home Buyer Update here) that could make purchasing a property easier and more affordable.

  • Migration Predicted to Recover

With net overseas migration set to fully recover to pre-pandemic levels there will be more pressure on the housing market than we’ve seen in recent years.

With the return of international students and the surge in migration, it is estimated that an extra half a million people will be looking for somewhere to live in Australia in the next two years.

  • Low vacancy rates bringing investors into the market

We are experiencing a rental crisis across the country, with historically low vacancy rates encouraging more investors into the market. Unfortunately for investors, rising interest rates and property prices have made this challenging – as well as rising building costs making it harder for investors and developers to buy and renovate or rebuild.

Is now the right time to buy or sell?

In short? Maybe. Unfortunately it’s not a one size fits all answer.

Ultimately, making an informed choice that aligns with your own circumstances and long term goals is key when navigating the property market.

Luckily, we’re here to help. We’ll sit down to work out what your goals are, what your property budget may be and how we can help you secure a property. Contact us today to get started!

Purchasing Property Through a Self Managed Super Fund

Purchasing Property Through a Self Managed Super Fund

Apr 13, 2023 | Investment Property, Self Menage Super Fund (SMSF)

Are you considering purchasing property through a Self-Managed Super Fund?

Purchasing property through a self-managed super fund (SMSF) can be a smart investment strategy for Australians looking to secure their retirement future – but it’s important to know what you’re doing.  

With the Australian property market experiencing consistent growth over the years, buying property through an SMSF can provide a range of financial benefits.

Source: https://www.realcrowd.com/post/reasons-to-invest

What are the benefits of purchasing property through a self-managed super fund?

One of the main advantages of purchasing property through an SMSF is the potential tax benefits. Income from rental properties held by an SMSF is generally taxed at a rate of only 15%, compared to the marginal tax rate that applies to individuals. This means that the rental income earned from an SMSF-owned property is taxed at a much lower rate, leaving more funds available for reinvestment or retirement income.


Other benefits of investing in property through a self managed super fund include:

  • Leveraging your investment by borrowing through limited recourse borrowing arrangements (LRBA)
    When investing in property through an SMSF, investors can leveraging their investment by borrowing money through limited recourse borrowing arrangements (LRBAs). This allows investors to purchase property with a smaller initial investment and to benefit from any capital growth over time.
  • Increased control over investments
    SMSF trustees can also benefit from increased control over their investments. Unlike traditional superannuation funds, SMSF trustees have direct control over the investment strategy and can make investment decisions in line with their specific goals and risk appetite. This level of control and flexibility can be particularly attractive to investors who want to take a more active role in managing their retirement savings.

What are the downsides of purchasing property through a self-managed super fund?

It’s important to note that investing in property through a self-managed super fund Is not without risks, including:

  • Fluctuating property values
  • The time and money involved in managing a property
  • The stress of dealing with leasing your property/choosing the right tenants/potential damage to property

With this in mind, it’s crucial that investors undertake thorough research and seek professional advice before making any investment decisions.

Is purchasing property through a SMSF right for me?

Overall, purchasing property through a self-managed super fund can be a sound investment strategy for those looking to diversify their portfolio, enjoy tax benefits and take greater control over their retirement savings. With the Australian property market showing consistent growth, SMSF trustees may find that investing in property is a smart move for their financial future.

If you’re interested in exploring your options and finding out more, get in touch! Sanford Finance has helped many clients secure property through their Self-Managed Super Funds as well as helped numerous clients with their general investment portfolios. We’ll work through the different options with you and find out which is best suited to your financial goals.

Get in touch with our team at www.sanfordfinance.com.au/contact or call us on 9095 6888

How your daily spending is impacting your borrowing power

How your daily spending is impacting your borrowing power

Oct 4, 2022 | Borrowing Power

Your morning coffee, a quick lunch with your colleagues, ingredients for dinner, your Netflix subscription… ordinary day-to-day expenses, but did you know that these can considerably reduce the amount you are eligible to borrow, even if you are a high income earner?

If you’re planning to buy a home, now might be the time to Spring clean your expenses and set yourself a weekly budget and here’s why:

Why do lenders care about living expenses?

Mortgage brokers and lenders are required to meet ‘responsible lending’ guidelines under the National Consumer Credit Protection Act (NCCP). These guidelines are designed to ensure that a borrower can afford to make the repayments on their loan without suffering ‘substantial hardship’.

This means, by law, all mortgage brokers and lenders must ensure that you have plenty of money left over from your income to repay your loan after you have covered your regular financial commitments.

What are living expenses?

A living expense is defined as anything that you spend your money on. Your morning coffee, Netflix subscription, monthly dinner out with friends and gym membership all count – even if you don’t see them as essential or could easily live without them.

When applying for a loan, we have to perform a thorough living expense and income assessment which determines your true financial position – and all of these expenses are included.

According to a 2018 survey by UBank, 86% of Australians don’t know how much money they spend every month on their living expenses – and those small expenses can quickly add up.

Without tracking your purchases, it’s easy to spend more than you earn without even realising – especially if you use a credit card.

But what if I plan to change my spending habits?

You might think “once I buy a property I’ll….”, but to most lenders, all that matters is how you’re spending money now.

Tips for controlling your living expenses

In order to control your living expenses, you first need to know where your money is going.

ASIC have a free MoneySmart Budget Planner that is a great place to start and it can be downloaded here. Another great tool from ASIC is the MoneySmart TrackMySpend app which helps you to record your weekly household budget, nominate spending limits, separate ‘needs’ from ‘wants’ and kickstart your savings goals.

How do we perform a living expenses assessment?

As mentioned, as part of the borrowing process, we need to conduct a thorough living expenses assessment. To do this, we’ll provide you with a Needs Analysis Questionnaire to help you work out your living expenses.

These expenses are divided into simple categories, including:

  • Childcare
    Including formal day care, nannies and occasional babysitters or childminding services.
  • Personal Care
    Clothing, footwear, cosmetics, personal hygiene products, hairdressing, manicures, massages etc.
  • Education
    All educational costs/fees for the borrower and any dependents, including books, uniforms, equipment and excursions.
  • Groceries
    This includes meat, fruit, vegetables and anything you might buy from a supermarket, including cleaning products.
  • Insurance
    This includes health, home, car, life, pet and all other insurances you may have.
  • Medical
    Doctors visits, dental care, pharmaceutical prescriptions, optical etc.
  • Utilities and Home Expenses
    Gas, water, electricity, rates, taxes, levies and any other costs for running your own home.
  • Entertainment
    Movie tickets, take away food, club memberships, gifts, holidays, hobbies and all recreational expenses.
  • Connections
    Includes expenses such as mobile phone plans, internet, home phones, magazine subscriptions, streaming services etc.
  • Transport
    Including personal vehicle expenses like petrol, tolls, insurance and car registration as well as public transport, car parking, car servicing and maintenance.
  • Rent
    This is for rent on a property that you live, board (if you are living with your parents or renting a room) or similar housing costs.
    Note: If you are buying a home you intend to occupy, rental expenses are not included as part of your living expenses assessment.
  • Investment Property Expenses
    Including any costs you are responsible for paying, such as council rates, insurance, property management fees, taxes and levies, body corporate and strata fees, maintenance etc.
  • Other
    All other expenses that do not fit into the above categories.

When should I cut back on expenses?

If you’re planning on purchasing a property, the best time to start is now. Regardless of whether you’re purchasing a home for yourself or an investment, it’s important to know how much you’re spending and where.

Remember that a lender will only give you a loan for an amount you can afford to repay, so cutting back on your everyday spending could give you increased borrowing power and will maximise the chances of your loan getting approved the first time.

Where do I start?

We are happy to run through your living expenses and help you find ways to budget and increase your borrowing power. Just contact our team via the website here, or give us a call on (02) 9095 6888.