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Renting a place
Rent rises, bonds, flatmates, pets and insurance, including the tax that quietly applies when you take in a boarder.
23 situations worked through, 17 of them with the sums shown. Each one links to the guide that sets out the rules behind it, and that guide is where any rate or threshold is kept current.
The people in these situations are illustrations written to show how the rules land on somebody, not real customers and not case histories. The arithmetic is real and the rules are real; the names and the circumstances are made up to teach.
Nothing on this page matches that. Try a shorter word, or the full list of situations.
Boarders and Flatmates Tax
The Taylor household - Two boarders, no tax
Wiremu and Anahera take in two students as boarders, providing a room and evening meals. Each boarder pays $220 a week. The Taylors want to know if they owe any tax.
- Board received: 2 boarders × $220 × 52 weeks = $22,880 a year
- Standard cost: 2 boarders × $245 × 52 weeks = $25,480 a year
- Board received ($22,880) is below the standard cost ($25,480)
No taxable income. Nothing to declare, no records needed, no tax to pay
Rachel - A boarder over the standard cost
Rachel has one boarder who pays $340 a week, including all meals. That is more generous board than the standard cost allows for, so some of it is taxable. Rachel is on the 30% marginal tax rate.
- Board received: $340 × 52 = $17,680 a year
- Standard cost: 1 boarder × $245 × 52 = $12,740 a year
- Taxable excess: $17,680 - $12,740 = $4,940
- Weekly view: $340 - $245 = $95 a week taxable
Tax at 30%: $4,940 × 0.30 = $1,482
Rachel is not taxed on the whole $17,680. The first $12,740 is covered by the standard cost. Only the $4,940 above it is added to her income and taxed. She declares that $4,940 in her return. If her real costs of hosting the boarder were higher than $12,740, she could instead use the actual-cost method, but not both in the same year.
Josh - Flatmates sharing costs
Josh and two friends rent a three-bedroom house together. The total rent is $780 a week. Josh is the one named on the tenancy agreement, so he collects each flatmate's share and pays the landlord. He wonders whether the money passing through his account is taxable income.
- Total rent: $780 a week, split three ways = $260 each
- Josh collects from the other two: $260 × 2 = $520 a week
- Josh pays the landlord the full $780 a week
The $520 collected and passed on is not taxable income
The Nguyen family - Renting a room as a tenancy
The Nguyens own a property with a separate self-contained unit and rent it to a tenant under a tenancy at $520 a week. No meals or services are provided, so this is rental income, not board. They are on the 33% marginal rate.
- Rental income: $520 × 52 = $27,040 a year
- Deductible interest (100% for 2026/27): $18,000
- Rates: $2,600
- Insurance: $1,600
- Repairs and maintenance: $1,000
- Total expenses: $18,000 + $2,600 + $1,600 + $1,000 = $23,200
Taxable rental profit: $27,040 - $23,200 = $3,840
Because the Nguyens rent to a tenant and provide no board, the $245 standard cost does not apply. This is ordinary residential rental income: they return the actual rent and claim the actual expenses. The full interest-deductibility and loss ring-fencing rules apply, which our rental interest deductibility guide explains in detail.
Flatting for the First Time NZ
Jordan, Mia, and Tyler, Wellington
Three friends on a joint tenancy at $600/week total. Tyler stops paying after month 3.
This one turns on the rules rather than on a calculation, so there are no sums to show.
Aroha, 22, Auckland
Landlord claimed $800 from her $1,200 bond for "cleaning and carpet damage".
This one turns on the rules rather than on a calculation, so there are no sums to show.
Liam and Ella, Dunedin
Rented a villa at $380/week with no fixed heating, visible mould, and single-glazed windows with gaps.
This one turns on the rules rather than on a calculation, so there are no sums to show.
Priya, 20, Hamilton
Signed a 12-month fixed-term lease, got a job offer in Auckland at month 4.
This one turns on the rules rather than on a calculation, so there are no sums to show.
Rent Increases: The Rules and Your Options
Aroha - periodic tenancy, first increase
Aroha rents a two-bedroom flat in Wellington on a periodic tenancy that started on 1 March 2025 at $600 a week. In late 2025 her landlord wants to lift the rent to $640.
- Tenancy start: 1 March 2025
- Earliest a first increase can take effect: 1 March 2026 (12 months after start)
- Notice required: at least 60 days written notice
- Latest the landlord can serve notice for a 1 March 2026 start: about 31 December 2025
The $40 increase is valid from 1 March 2026, provided written notice stating $640 and the start date is served by around 31 December 2025.
Sam and Priya - bond and rent in advance up front
Sam and Priya are moving into a $550 a week house. The property manager asks for 4 weeks bond, 2 weeks rent in advance, plus a further 4 weeks "security deposit".
- Maximum bond: 4 × $550 = $2,200
- Maximum rent in advance: 2 × $550 = $1,100
- Lawful total up front: $2,200 + $1,100 = $3,300
The extra 4 weeks "security deposit" of $2,200 is not allowed. A landlord cannot hold more than 4 weeks as bond, and there is no separate lawful "security deposit" on top.
Any request beyond 4 weeks bond and 2 weeks rent in advance is over the legal limit. Sam and Priya should ask for the extra charge to be removed in writing, and can raise it with Tenancy Services if the manager insists.
Tomas - fixed term with no rent-review clause
Tomas signs a 12-month fixed-term tenancy in Hamilton at $500 a week. His agreement contains no rent-review or rent-increase clause. Six months in, the landlord emails asking to raise the rent to $540.
- Tenancy type: fixed term, 12 months
- Rent-review clause in the agreement: none
- Result: rent cannot be increased during the fixed term
Tomas keeps paying $500 for the full fixed term. The landlord can only propose an increase once the term ends or the tenancy becomes periodic, and then only with 60 days notice and the 12-month limit.
If Tomas's agreement had included a rent-review clause, an increase would have been possible during the term, but still only once in 12 months and with at least 60 days written notice. The absence of the clause is what locks his rent.
Mereana - challenging an above-market increase
Mereana rents a three-bedroom house in Christchurch, currently $650 a week. Her landlord serves valid 60 days notice to raise it to $760. Similar three-bedroom houses in her suburb rent for around $650 to $680.
- Proposed rent: $760
- Market range for similar homes: about $650 to $680
- Gap above the top of the market range: $760 - $680 = $80 a week
The proposed rent sits clearly above the market range, so there is a reasonable case that it substantially exceeds market rent.
Renting With Pets: Pet Bonds and Your Rights
Jess - pet bond on a $600 a week home
Jess rents a house for $600 a week and wants to keep a cat. The landlord gives written consent and asks for a pet bond in addition to the ordinary bond.
- Standard bond: up to 4 × $600 = $2,400
- Pet bond: up to 2 × $600 = $1,200
Maximum total bond: $2,400 + $1,200 = $3,600, all lodged with Tenancy Services
Ben - the 21-day consent clock
Ben emails his landlord on 1 February 2026 to request consent to keep a small dog, using the Tenancy Services request form. He hears nothing back.
- Request made: 1 February 2026
- Landlord must decide and respond within: 21 days
- Deadline to respond: about 22 February 2026
If the landlord does not respond in time, they can face a penalty of up to $1,500.
A missed deadline exposes the landlord to a penalty, but it does not automatically mean you can move the pet in. Follow up in writing, ask for a decision, and if the landlord keeps ignoring the request or declines without a reasonable ground, contact Tenancy Services or apply to the Tenancy Tribunal.
Aroha - apartment with a body corporate no-pets rule
Aroha rents an apartment for $500 a week and asks to keep a cat. The building is governed by a body corporate whose rules prohibit cats and dogs. Separately, her flatmate relies on a certified guide dog.
- Cat request: body corporate rules prohibit pets
- Result for the cat: the landlord has a reasonable ground to decline
- Guide dog: a disability assist dog is not a pet
The cat can be declined on reasonable grounds, but the certified guide dog needs no consent and no pet bond, and cannot be refused as a pet.
The right to request a pet does not beat a genuine body corporate or cross-lease ban. A landlord cannot agree to something the building rules forbid, so that ban is a reasonable ground to say no to the cat. The assistance dog is a separate matter and sits outside the pet rules entirely.
Mia - pet damage above the pet bond
Mia rents for $600 a week and paid a $1,200 pet bond for her dog. At the end of the tenancy the dog has scratched a door and damaged carpet, costing $1,500 to put right, which is beyond fair wear and tear. The damage happened in 2026.
- Pet-related damage beyond fair wear and tear: $1,500
- Pet bond available: $1,200
- Applied from the pet bond: $1,200
Balance Mia still owes: $1,500 - $1,200 = $300
Because pet damage from 1 December 2025 is the tenant's responsibility, Mia is liable for the full $1,500. The pet bond covers $1,200 of it, and she pays the remaining $300. This is why the extra pet bond exists, and why keeping a pet well and repairing minor issues early is worthwhile.
Tenant Liability for Damage
Sam - A careless kitchen fire
Sam leaves a pan of oil on a hot element and steps out of the room. It catches fire and damages the kitchen. The repair is assessed at $12,000. Sam's rent is $600 a week, and the landlord's insurance excess is $1,000.
- Was it careless? Yes, so the cap applies
- Four weeks' rent: $600 × 4 = $2,400
- Landlord's insurance excess: $1,000
- Cap is the lesser of $2,400 and $1,000
Sam is liable for $1,000, not the full $12,000
Dan - Intentional damage, no cap
After an argument, Dan deliberately punches holes in two walls and kicks a door off its hinges. The repair comes to $6,500. His rent is $500 a week and the landlord's excess is $1,500.
- Was it intentional? Yes, so no cap applies
- Four weeks' rent ($2,000) and the excess ($1,500) do not limit intentional damage
- Dan is liable for the full repair cost
Dan owes the whole $6,500
Because the damage was intentional, the four weeks' rent or excess cap does not help Dan at all, and no insurance will pay for damage he caused on purpose. Intentional damage can also be an imprisonable offence, which brings consequences well beyond the repair bill.
Mere - Fair wear and tear, no charge
Mere has rented the same house for six years. When she leaves, the carpet is worn thin in the hallway and the curtains have faded from years of sun. The landlord wants to charge her $2,800 for new carpet and curtains and talks about keeping her bond.
- Is worn carpet after six years wear and tear? Yes
- Are sun-faded curtains wear and tear? Yes
- Tenant liability for fair wear and tear: none
Mere is charged $0 and her bond must be refunded
Priya - Using tenant liability cover
Priya accidentally causes a small kitchen fire, careless rather than deliberate. The repair is $9,000. Her rent is $550 a week and the landlord's excess is $2,500. Priya holds a contents policy that includes tenant liability cover, with her own excess of $250.
- Four weeks' rent: $550 × 4 = $2,200
- Landlord's insurance excess: $2,500
- Her capped liability is the lesser: $2,200
- Priya claims the $2,200 on her tenant liability cover
- She pays only her own policy excess: $250
Priya is out of pocket $250 instead of $2,200
The Act capped Priya's liability at $2,200. Her tenant liability cover then paid that amount to the landlord, so her real cost was just her own $250 excess. For a few dollars a week on top of contents insurance, an accident that could have cost her $2,200 cost her $250.
Moving Out of Home NZ
Tia, 21, Wellington
Tracked spending for 4 weeks after moving out. Discovered she was spending $185/week on food.
This one turns on the rules rather than on a calculation, so there are no sums to show.
Caleb, 19, Hamilton
Moved out with $1,200 in savings. Earned $42,000/year.
This one turns on the rules rather than on a calculation, so there are no sums to show.
Aroha, 22, Auckland
Lived at home for 18 months after starting work at $55,000. Paid parents $100/week board. Saved aggressively.
- Net income: ~$850/week
- Board to parents: $100/week
- Personal spending: $150/week
- Savings: $600/week for 18 months = $46,800
- Moved out with: $46,800 in savings (13+ months of expenses)
- Setup costs ($3,500) barely dented the buffer
Saving and investing Running a business Buying a first home Running a household Debt you cannot pay Scams, faulty goods and your rights Changing or losing a job Separation, death and estates Understanding your pay and tax Owning a rental or holiday home
Every situation
Situations are taken from the guides listed above and are worked examples for education, not advice. Figures used in an example were current when the guide was written; the guide holds the maintained figure. Last reviewed 2026-09-07. See also the arithmetic on its own, every question the site answers and the guides.