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Yes. A residential rental provider can increase the rent in Victoria, but increasing the rent is no longer as simple as choosing a new weekly amount and giving the renter notice.
The Residential Tenancies Act 1997 (Vic) imposes strict requirements around when rent can be increased, how much notice must be given and, importantly, how the proposed increase has been calculated. Getting these requirements wrong can make an otherwise reasonable rent increase invalid.
For rental providers, this can have significant consequences. An incorrectly prepared notice may not become apparent until months later, potentially after the 90-day notice period has already run. If the notice is subsequently found to be invalid, the process may need to start again, including the issuing of a new notice and potentially waiting another 90 days for the increase to take effect.
This is one of those areas of property management that appears relatively simple until something goes wrong.
The starting point is section 44 of the Residential Tenancies Act 1997 (Vic).
Section 44 requires a rental provider to give the renter at least 90 days' notice of a proposed rent increase using the prescribed form. Importantly, the section also provides that only one rent increase can be provided for in each notice: s 44(2).
The notice must state the amount of the proposed rent increase under s 44(3)(a), as well as the method by which the rent increase was calculated under s 44(3)(b). It must also contain a statement informing the renter of their right under section 45 to apply to the Director of Consumer Affairs Victoria to investigate and report on the proposed rent: s 44(3)(c).
Rent generally cannot be increased at intervals of less than 12 months: s 44(4A). Critically, s 44(5) provides that a rent increase made in contravention of the section is invalid.
There are additional considerations where an increase is proposed during a fixed-term rental agreement. Under s 44(4), the agreement must permit the increase and specify either the amount of the increase or the method by which it is to be calculated.
These are not simply administrative requirements. They determine whether the proposed increase can lawfully take effect.
This is usually the first question rental providers ask us. There is currently no general percentage or dollar cap on residential rent increases in Victoria, but that does not mean a rental provider can simply nominate any new amount and have their property manager issue a notice.
A rental provider may quite reasonably say, for example, that the property is currently returning $600 per week and they would like to increase it to $650. That may ultimately be achievable, particularly where the property has fallen behind the market. However, simply wanting another $50 per week is not, by itself, a method of calculating the increase.
The amount being sought and the method used to calculate that amount are two different things.
This distinction is important because section 44(3)(b) specifically requires the notice to state the method by which the increase was calculated. A professional property manager therefore needs to do more than simply ask an owner what rent they would like to achieve and insert that figure into a notice.
At Woodards, we consider the rental provider's desired outcome alongside the rental agreement, the property itself, current market conditions, available evidence and the methodologies that may appropriately be used to calculate and support the proposed increase. The objective is not simply to issue a rent increase notice. It is to recommend and implement an increase that is properly calculated, supported and capable of withstanding scrutiny if challenged.
This has become one of the more technically complicated aspects of Victorian residential property management.
Section 44(3)(b) specifically requires the notice to state the method by which the rent increase was calculated. This requirement has caused difficulties because there is a considerable difference between identifying a general reason for increasing the rent and explaining the actual methodology used to calculate the new amount.
Consumer Affairs Victoria provides examples of methodologies that may be used, including CPI, a relevant rental index, a specified percentage or a fixed dollar amount, provided the calculation and process are properly explained. Simply stating that an increase is based on "market rent", "CPI", "rental provider instructions" or similar wording does not necessarily demonstrate how the proposed figure was calculated.
This creates an important distinction between starting with a figure and then trying to justify it, and using an appropriate methodology to actually calculate the proposed rent.
For rental providers, that distinction may seem technical. If the notice is challenged, however, it can become extremely important.
Comparative market evidence has historically been one of the most common methods used by Victorian estate agents to assess market rent. It can also be one of the more complicated methods to apply properly.
The difficulty is that not every nearby rental property is genuinely comparable. Location, accommodation, land or apartment size, parking, heating and cooling, renovations, outdoor areas, overall condition and the date on which the comparable property was leased can all affect the relevance of the comparison.
There is then a second question: even if appropriate comparable properties have been identified, how were those properties actually used to calculate the proposed new rent?
Earlier VCAT decisions have found rent increase notices invalid where wording such as "Comparative Market Analysis" did not adequately explain the methodology used to calculate the increase. More recent authority has further developed what constitutes an adequate "method" for the purposes of s 44(3)(b). The practical lesson for rental providers is that simply selecting several nearby properties and describing them as comparable does not necessarily establish a sound methodology.
A properly managed rent review should therefore identify the appropriate methodology first, apply it correctly and retain the supporting evidence. This is an area where an experienced property manager should be doing considerably more than generating an automated rent increase notice.
Yes. Under section 45 of the Residential Tenancies Act 1997, a renter who considers the proposed increase excessive can apply to the Director of Consumer Affairs Victoria to investigate and report on the proposed rent. The renter generally has 30 days after receiving the notice to make that application.
The assessment framework has also become more detailed. From 31 March 2026, relevant considerations include the proposed rent compared with the existing rent, the rate of increase having regard to Melbourne CPI, comparable properties and characteristics of the property including its location, size, facilities and condition.
Formal challenges are not an everyday occurrence across most rental portfolios, particularly given that rent increases have become a regular feature of the Victorian rental market in the years following COVID. Nevertheless, the right to challenge remains, and rental providers should not assume that their particular increase will escape scrutiny.
Every rent increase should be prepared on the assumption that somebody may eventually ask you to explain exactly how you arrived at that figure.
This is where what appears to be a relatively minor error can have a significant financial consequence.
Section 44(5) provides that an increase made in contravention of section 44 is invalid. Consider a situation where a property manager recommends an increase and serves the notice. The rental provider then waits the required 90 days. The renter subsequently challenges the increase, or obtains advice about the validity of the notice, and the methodology is scrutinised. If the notice is ultimately found to be invalid, the rental provider may find themselves back at the beginning of the process.
A new compliant notice may then need to be issued, potentially triggering another 90-day waiting period before the increase can commence. Depending on when the problem is identified and resolved, considerably more than three months may have passed since the rental provider originally decided to review the rent.
The financial impact can quickly become meaningful. On a proposed increase of $50 per week, each additional month of delay represents more than $200 in foregone rental income. More importantly, this is a loss that may have been entirely avoidable if the rent review and notice had been properly managed from the outset.
Absolutely. A good property manager should not simply ask a rental provider, "How much would you like to increase the rent?"
The property manager should be providing advice about the property's current rental position, what the market evidence supports, what the rental provider would ideally like to achieve and the appropriate methodology for calculating the proposed increase. They should also understand the legislative requirements well enough to recognise when a particular approach creates unnecessary risk.
At Woodards, our role is to understand what our rental providers would ideally like to achieve and then determine the appropriate strategy to get as close to that outcome as the market, available evidence and legislation reasonably support. Sometimes the answer is straightforward. In other cases, the rental agreement, methodology, market evidence or proposed increase makes the position considerably more complicated.
Our property management teams deal with Victorian rental legislation, rental reviews, market evidence and renter communications every day. We manage the process from assessing the property and recommending the new rent through to selecting the appropriate methodology, preparing the notice and retaining the evidence necessary to support it.
In most circumstances, yes, provided the timing, rental agreement and statutory requirements allow it. But rental providers should not confuse being entitled to review the rent with being entitled to simply nominate a new figure.
The more important questions are what the new rent should be, what methodology should be used to calculate it, whether the notice has been prepared correctly and whether the proposed increase can withstand scrutiny if it is challenged.
If you are having to work these questions out yourself, or you are not confident in the advice you are receiving from your current property manager, it may be worth obtaining a second opinion.
Speak with your local Woodards property management team. We can review your property, current rent and available market evidence, explain what we believe can reasonably be achieved and manage the legislative and procedural requirements necessary to get you there.
You own the investment. Let us take care of the complexity.
This article provides general information about Victorian residential tenancies and should not be relied upon as legal advice. Individual rental agreements and circumstances can affect the application of the legislation.
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