Setting rent in Rent Pressure Zones

Information on paying rent, setting rent, market comparisons, and rent reviews

Rent setting in a Rent Pressure Zone (RPZ)

A Rent Pressure Zone (RPZ) is a designated area where rents can only be increased by up to 4% annually. Certain rules must be followed for rent reviews in RPZs

What are Rent Pressure Zones?

Rent Pressure Zones are geographic areas where rents can only rise by up to 4% annually. This limitation is in place for a maximum of three years and applies when rents are set at the start of a tenancy and when rents are reviewed during an ongoing tenancy. To find out if your property or tenancy is in a Rent Pressure Zone, please use our Rent Calculator

The rent set for the property must be in line with local market rents for similar properties, and three examples of rents for comparable properties must be used to show this.

The map below shows the current designated Rent Pressure Zones.

 

How is the rent calculated?

The RPZ Rent Calculator  is a useful tool to calculate the maximum allowable rent in an RPZ area. 

If a landlord is setting the rent in a Rent Pressure Zone, the amount can not be greater than the amount determined by the formula below.

New tenancies

In the case of a new tenancy in a Rent Pressure Zone, unless the property is exempt from the RPZ rental restrictions a landlord is required to furnish the tenant, in writing, with the following information at the commencement of the tenancy:

  1. The amount of rent that was last set under a tenancy for the dwelling,
  2. The date the rent was last set under a tenancy for the dwelling, and
  3. A statement as to how the rent set under the tenancy of the dwelling  has been calculated having regard to the Rent Pressure Zone formula.

Additionally the rent cannot be set above the local market rents for similar properties in the area and three comparable examples for similar properties in the locality must be presented to demonstrate this.

The Rent Pressure Zone Formula

Rent Reviews in Rent Pressure Zones 

 

Comparable market rents

Rent cannot be set above the local market rents for similar properties in the area and three comparable examples for similar properties in the locality must be presented to demonstrate this. The landlord must include the rent amount for three comparable dwellings of a similar size, type and character and situated in a comparable area to establish market rent. See sample notices of rent reviews here.

Evidence of the rent charged for comparable properties can be in the form of advertisements for such properties published within the previous four weeks. If a tenant considers that they are being asked to pay more than the market rent, they can seek clarification from the landlord or take a dispute case to the RTB within 28 days of receipt of receiving noitce of the rent change. 

Exemptions to the Rent Pressure Zone rental cap

Not all rental properties in Rent Pressure Zones are subject to a rental restriction

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

  1. New to the rental market and have not been let at any time in the previous two years, and
  2. that have undergone a substantial change.

A ‘substantial change’ must be a significant change or improvement  to the dwelling which results in increased market value of the tenancy and therefore adds to the letting value of the property. The substantial change must have resulted in the property increasing its letting value. For example, simple repainting or replacement of white goods would not be sufficient.

The RTB, with the Department of Housing, are preparing guidance on ‘substantial refurbishment’ to be issued shortly.