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Posted on 12 05 2021

How Much Does It Cost to Comply with the Healthy Homes Standards?

For months now, the new Healthy Homes Standards have occupied the minds of landlords and tenants alike. Heating, insulation, ventilation, moisture ingress and drainage, and draught stopping have become familiar to us all.

As a landlord, you are responsible for ensuring the requirements of these new standards are met. While it’s important to be aware of the cost of meeting the new reforms, it is also vital you know the cost of not complying.

 

Standards costs

  1. The heating standard states that a living space must have a fixed heating device, like a heat pump. Heat pumps typically cost between $2,500 to $3,000.

 

  1. Since 1 July 2019, all rental properties were required to have ceiling and underfloor insulation with a minimum R-value. The new standards increased this minimum requirement for existing insulation. Due to this, the majority of rental properties will only need a top-up of insulation, which can cost around $3,000.

 

  1. Kitchen and bathrooms must have ventilation in the form of extractor fans. This means that most rental properties will need at least two, costing around a total of $1,000.

 

  1. The moisture ingress and drainage standard is aimed at reducing mould and dampness inside rental properties. Gutters, downpipes, and drains must all be clear, and if your property has an enclosed subfloor, then a ground moisture barrier must be installed. These moisture barriers cost around $700.

 

  1. When it comes to the draught stopping standard, this cost can vary depending on the number of cracks or holes in the property needing repair.

 

Claiming costs

These standards are considered capital and can be treated as assets, which means the costs are claimed as depreciation. As a result of COVID, the government has changed the threshold for these depreciation assets.

If purchased between 17 March 2020 and 16 March 2021, you are eligible to claim up to $5,000. Anything purchased after this date can be claimed up to $1,000.

As the owner of a rental property, you will be eligible to claim any of the following:

  • Heat pumps
  • Ventilation systems
  • Insulation
  • Extractor fans
  • Moisture barriers

Some properties may only require top-ups or upgrades. In these cases, they will typically be treated as ‘Repairs and Maintenance,’ and 100% can be claimed against rental income.

Examples of this include:

  • Topping up insulation
  • Heat pump maintenance
  • Draught stopping

 

Not complying

Simply put, the cost of not complying is significantly more than the price of getting your property up to scratch. These costs come in not only the form of penalty fees but also stress and time.

By July 2024, all rental properties must comply with these standards. Tenants can apply to the Tenancy Tribunal if they believe the property does not meet the requirements. If successful, landlords can be liable for a penalty fee of up to $4,000.

Landlords that are found guilty of not complying will then be ordered to remedy the issues immediately. This means that landlords will be forced to work with contractors on short notice, which will only become more stressful and less cost-effective.

Even if a tenant doesn’t go to the Tribunal, checks will still be performed on rental properties.

 

While the initial cost of complying may seem daunting, the cost of not complying is significantly more stressful and more of a financial burden. For the sake of you and your property, be sure your property meets the new requirements in time.

If you are concerned about the compliance of your property, get in touch with our team of friendly assessors who will help ensure your property meets the standards.

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