If you’ve paid a rental bond (or security bond) for a rental property in Australia, you may be entitled to receive the interest accumulated during your lease.
Granted, it won’t be enough to let you retire any time soon, but it’s important to know your entitlements.
In New South Wales
According to Fair Trading NSW, a small amount of interest may be paid to you when you get your bond back. In New South Wales, rental bonds are pooled to earn the maximum amount of interest. The majority of the income earned from the collective pool of rental bonds is allocated to the NSW Civil and Administrative Tribunal and organisations across NSW under the Tenants Advice and Advocacy Program.
As a tenant in Victoria, you won’t be paid any interest earned on your bond, whether it’s returned in full or not. According to the Residential Tenancies Act (Section 436) any interest received on the investment of your bond in Victoria must be paid into an account, but it won’t be going back into your pocket. Instead, this money will likely fund the Victorian Civil and Administrative Tribunal.
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Sorry Queensland tenants, they don’t pay any interest on your bond in your state either. According to the Residential Tenancies and Rooming Accommodation Act, no one other than the authority has legal or beneficial entitlement to an amount earned on the investment of a rental bond held by the authority. Any payments from the rental bond interest account will typically be used for establishing or administering rental advisory services or setting up projects to improve relationships between landlords and tenants.
In Western Australia
If you’re a tenant in Western Australia, you won’t be paid any interest at all. Interest is earned from a collective pool of bonds (much like the situation in NSW) through which investments are made. The interest earned on bond monies is paid into a special fund managed by the state government called the Rental Accommodation Account.
Looking to finance your next rental bond? Why not use RentBond? RentBond is a low-cost way to pay your rental bond over time. When you apply for RentBond, we arrange for your bond to be paid in full to your property manager, and you pay it back in 6 or 12 monthly instalments. It’s like a personal loan but the funds go directly to your property manager. Visit www.rent.com.au/rentbond to get started.
In South Australia
Things are looking up in South Australia though! Interest is again accrued through a collective pool of bonds and invested, just the same as it is in WA. Unlike WA, however,, tenants in SA are entitled to receive some interest from their rental bond. The amount calculated depends on the amount of bond returned to you at the end of your tenancy and accrues from the date you paid the bond to the date you’re reimbursed.
In the Northern Territory
In the Northern Territory, there is no bond authority like there is in other states and territories. If your tenancy agreement doesn’t specify who will receive the interest on your rental bond, the interest has to be paid to the party who is entitled to receive the greater part of your rental bond at the end of your tenancy – so that could be you! The only exception here is when the bond amount is being held by a real estate agent – agents in the NT are entitled to this interest.
In the Australian Capital Territory
The way interest is managed in the Australian Capital Territory is similar to how it’s done in most other jurisdictions. In the ACT, bond money is kept on trust and interest is kept in a special account. This interest is put towards the operation of the ACT Civil and Administrative Tribunal, as well as the Tenants Union ACT.
In Tasmania, MyBond (the Rental Deposit Authority) will hold your money until the end of your tenancy, but it does not pay tenants interest on the bond they’ve held.