Private Rental Incentives - Information for Owners and Agents

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Private Rental Incentives (Pilot Program)

Information for Owners and Agents

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Overview

The aim of the Private Rental Incentives pilot program is to assist eligible low income Tasmanians into successful long term tenancies in the private rental market.

Incentives will be offered to property owners to encourage them to make their private rental properties available and affordable to low income households.

Properties included in the program will be available for 12 month leases and rents will be affordable. Properties selected are those which will have the greatest potential for ongoing affordable leases following the pilot period.

It is anticipated that 110 properties will be made available under this pilot initiative by June 2019.

Applications for the program opened in May 2018.

Why are only 110 properties needed?

This is a pilot program and so we will commence with a small number of properties and tenants.

The pilot will be reviewed in 2019.

What types of properties are we looking for?

Preferred properties for this initiative are:

  • Currently used for short stay accommodation
  • New to the rental market (includes new ownership of an investment property)
  • Current rental properties that are vacant at the time of application (if previously rented, the vacancy must have been tenant initiated and able to be verified)

Preferred properties will:

  • Be close to health services, regular and easily accessible public transport, shops and grocery stores
  • Meet minimum standards as per the Residential Tenancy Act 1997
  • Must be adequately insured and evidence of this insurance provided
  • Be available to rent for a minimum of 12 months with the option of extension
  • Meet the demands of the social housing tenant profile in terms of affordability, property type, size and location

We have invited suitable people on the housing register to apply for the pilot. Not all applicants on the housing register are eligible for the pilot.

Preference will be given to properties that are in high demand by our applicants.

There is a strong demand for one and two bedroom properties throughout the State that are located close to main cities and towns. However, larger homes for families are also required.

What is considered affordable and what rent will I receive?

The weekly rents need to be affordable for our tenants.

We want tenants to have the best opportunity to sustain housing in the private rental market following the initial 12 months of the pilot program.

Maximum weekly rent has been set at 20 per cent below the median market rent based on the size and location of the property.

This is considered to be the maximum amount affordable for low income earners.

Rent may be negotiated with the owner but must not be higher than the maximum and must take into consideration the intent of ongoing affordability for the tenant.

The Maximum Capped Weekly Rents are outlined in the table below:

Region

Bedrooms

Maximum (capped) Rents

North West

1

$133

2

$177

3

$216

4

$248

North

1

$148

2

$218

3

$238

4

$289

South

1

$184

2

$266

3

$324

4

$370

Owners must be willing to accept the maximum rent as per the table above when participating in the initiative.

What are the financial incentives?

The financial incentives are $10 000 in the North and North West and $13 000 in the South per property, per annum.

It is higher in the South because rent prices and property costs are higher.

The incentive is paid on a quarterly basis or as arranged with the Community Housing Provider.

The incentive payments are paid in addition to the weekly rent.

The incentive payments will only be paid in instalments (not as a lump sum payment of the full amount).

How does the incentive payment affect my income/pension and is the incentive taxable?

It is recommended that you contact your financial advisor or Centrelink (where applicable) prior to submitting your Property Application Form to discuss how the incentive payment may affect you.

How do I apply for the program and what’s involved in the application process?

Owners can submit an application for the program by completing the Property Application Form (available on our website) and sending it to Housing Tasmania.

Housing Tasmania will complete an initial review of the application material to assess whether the property meets the eligibility criteria and whether there is sufficient demand for that property type and location.

Housing Tasmania will let you know the outcome of this initial review.

If the property is deemed eligible the Community Housing Provider in your region will then conduct a physical inspection of the property to ensure the property meets Residential Tenancy Act 1997 (RTA) minimum standards, has the required insurance in place, is suitable for the program and also meets demand from our applicants.

If the property is accepted by the Community Housing Provider, a head lease will be signed between you and the Community Housing Provider.

The Community Housing Provider will then find a tenant. Once a tenant is found a sub-lease will be signed between the tenant and the Community Housing Provider. The Community Housing Provider will be the ‘tenancy manager’ throughout the period of the lease.

The tenant will then move into the property on the agreed date.

How long before the tenant moves in?

The anticipated timeframe between making a property application and signing a sublease with a tenant is 4 weeks.

My property won’t be vacant until later in 2018 or 2019. Can I still apply to join the initiative?

We will only accept applications for properties that are vacant at the time of application or are new to the rental market.

If your property isn’t available until the later stages of the pilot period, you may choose to have your application put on hold, which means a decision about its eligibility for the program will not be made until closer to the date the property will be available and will be based on the demand for that property type at that time.

The closing date for applications is 30 June 2019.

My property is currently for sale can I apply?

No. Properties must not be for sale at the time of application.

I am building or thinking of building a property - can I apply for the Private Rental Incentives?

No. As this is a pilot we are unable to accept properties that are under construction or are in the planning stage.

A requirement at the time of application is that properties must meet minimum standards as set out in the Residential Tenancy Act 1997 and be ready for occupancy.

My current tenant is a low income earner, can I receive the incentive?

No. Existing tenancies are not eligible for the initiative.

The intent of the initiative is to increase choice for low income Tasmanians in the private rental market.

Can I end my current tenancy so I can apply for this initiative?

No. We will only accept vacant properties or recently ended tenancies that are tenant initiated. We may also ask for proof to verify this.

Tenancies can only be ended for the reasons set out in the Residential Tenancy Act 1997.

We conduct a number of checks to ensure existing tenants are not displaced by this program.

Do I choose the tenant?

No. Suitable tenants that will be able to successfully sustain a private tenancy are identified and chosen from the Social Housing Register by Community Housing Providers. The Community Housing Providers then manage the tenancy.

Potential tenants were invited to apply for the program and those who have applied will be matched to suitable properties through the Community Housing Providers using their experienced tenancy managers.

I know a low income earner, can I rent my property to them directly through this program?

No. Eligible tenants for this program must have an approved private rental incentives application (made through Housing Connect). Community Housing providers will allocate tenants based on best fit and their position on the short-list.

What are Community Housing Providers?

Community Housing Providers work with Housing Connect and Housing Tasmania to provide safe and affordable homes through various programs. Collectively, Community Housing Providers manage over 4 000 properties in Tasmania.

Our Community Housing Providers are registered and experienced tenancy managers. Owners with approved properties will sign a head lease with one of the Community Housing Providers.

As tenancy managers, Community Housing Providers will conduct regular property inspections and support the tenant to maintain a successful tenancy.

Community Housing Providers will be your first point of contact for any questions or concerns about the tenancy.

What is a head lease?

A head lease is a tenancy agreement signed between a property owner or agent and a head tenant. The head tenant can then sub-lease the property.

The Community Housing Provider will be the head tenant for the Private Rental Incentives initiative.

Why do I have to sign a head lease?

Through the head lease we are able to provide owners with guaranteed rent and tenancy management by the Community Housing Provider for the term of the lease.

Can I have a direct lease with the tenant instead of a head lease?

No. One of the requirements of the Private Rental Incentives is to enter into a head lease with a Community Housing Provider.

Why do I need to provide evidence of insurance (Certificate of Currency)?

It is an eligibility requirement of the Private Rental Incentive that a property is adequately insured. This includes cover for property damage by the tenant. A Certificate of Currency must be sighted by the Community Housing Provider prior to signing the payment agreement. The Community Housing Provider may also check to ensure the required insurance is being maintained throughout the tenancy.

Why do I need to provide photos of my property?

Photos are required to assist in the approval process. By providing photos we aim to ensure a quick process from submitting your property application to your new tenant moving in.

My property wasn’t approved. I thought you needed houses?

Through the pilot it is anticipated that 110 households will be assisted.

We will therefore give preference to properties that meet identified demand and need of the tenants who have applied to be part of the Private Rental Incentives.

We have received a large number of applications from property owners and therefore not all suitable properties will be approved.

What happens after 12 months?

The incentive payment is a one off payment and is associated with a 12 month lease on your property.

The aim of the Private Rental Incentive program is to assist low income earners into successful long term tenancies.

If the first 12 months has been successful for you and the tenant, we strongly encourage you to sign a new and direct lease.

Who do I contact if there is an issue during the term of the lease?

It is recommended you contact the Community Housing Provider who is managing your tenancy to discuss any concerns.

However, if you feel that an issue has not been resolved, please contact the Private Rental Consultant in your region.

The Residential Tenancy Act 1997 sets out the legislative obligations for tenants and property owners.

What happens if I need to lodge a dispute in regards to the tenant?

Prior to lodging the dispute we suggest contacting the Community Housing Provider who is managing the tenancy to discuss your concerns. If you still wish to proceed with lodging a dispute this must be done in accordance with the Residential Tenancy Act 1997.

Can I leave the initiative at any time?

No. As with any fixed term tenancy agreement, the head lease can only be terminated by either party in accordance with the Residential Tenancy Act 1997.

What happens if I decide to change my agent/property manager? Can my property stay in the initiative?

Yes, but you will need to notify the Community Housing Provider and advise them of the change.

What happens if I want to sell my property during the lease?

The tenancy will continue if the property is sold during the term of the head lease.

You must inform the Community Housing Provider and disclose to any potential buyer that there is a head lease in place for a fixed term.

Once a contract of sale has been signed you must comply with the notification periods of the Residential Tenancy Act 1997. You should also inform the Community Housing Provider of the expected settlement date.

You will continue to receive incentive payments under your payment agreement until the property settles.

The new owner will receive any remaining incentive payment and rent.

Further Information:

Further information about the Private Rental Incentives:

Website: www.dhhs.tas.gov.au/housing.privaterentals

Email:    housing.privaterentals@communities.tas.gov.au

Phone:

Private Rental Consultant – South

Mark Riley (03) 6166 3625

Private Rental Consultant – North & North-West

Carli Geard (03) 6777 1267

Further information:

Residential Tenancy Act 1997 (Tas) (including property minimum standards)

Consumer, Building and Occupational Services