Rent Pressure Zones (RPZs) are located in parts of the country where rents are highest and rising, and where households have the greatest difficulty finding affordable accommodation. With effect from 11 December 2021, for tenancies located within RPZs, rents cannot exceed general inflation, as recorded by Harmonised Index of the Consumer Price (HICP), or 2% per year pro rata, where HICP inflation is higher. This applies to new and existing tenancies (unless an exemption is being applied).
The lower cap on rent increases in RPZs is considered necessary given the prevailing high level of inflation (4.9% for the 12 months to February 2022 as per the HICP Index).
The cap does not apply to properties that already qualified for exemptions that allows for market rent to be set. This would include:
Rent reviews can only occur once every 12 months in an RPZ and once every 24 months outside an RPZ. A rent review may be permitted more frequently where there has been a substantial change in the nature of the accommodation.
All new tenancies created on or after 11 June 2022 will become tenancies of unlimited duration after six consecutive months in occupation under the tenancy, without a valid notice of termination been served. This contrasts significantly with previous practice whereby tenancies would end after six years, and a new tenancy arises if no steps were taken to end that tenancy.
Landlords continue to have the right to terminate a tenancy on specific grounds as provided in the Residential Tenancies Act 2004 which include:
Transitional measures are provided for in the Act that allow for the conversion of existing tenancies to tenancies of unlimited duration over time.
Should you have any taxation or business questions, our experienced tax team will be happy to share their insights with you.