New energy efficiency standards introduced for Canberra rental properties

The ACT government has announced new requirements for rental property ceiling insulation in an effort to increase energy efficiency and comfort for tenants. 

The new regulation will require all rental properties without ceiling insulation or those with a thermal resistance value below R2 to have insulation installed or upgraded to R5. The higher the R-value, the better the insulation is at reducing heat loss. 

Rental homes with insulation currently at R2 or above already meet the requirements, and will not have to upgrade. 

The commencement of upgrades will start on April 1, 2023, with a phase-in period until November 30, 2026. From April next year, it will become a requirement for rental providers to disclose if the home is abiding by these new rules in all advertisements and agreements.

The government’s Sustainable Household Scheme will be expanded to include the installation of ceiling insulation, meaning landlords may be able to acquire a no-interest loan of no more than $15,000 to cover the cost. 

Better Renting executive director Joel Dignam has welcomed the news as a starting point to providing more healthy rentals in the ACT. 

“For too long, renters have had to suffer in freezing homes that fail to meet World Health Organization guidelines, putting them and their families at risk,” he said. 

“A simple measure like ceiling insulation can make a big difference in keeping them warm in through winter and the heat out through summer – the ceiling insulation standard will literally save lives.” 

From the perspective of investors, James Scott of VERV Property said the additional expense calculation that the regulation requires will be worth it in the long run. 

“Investors will need to be diligent with their research around whether their properties are compliant, but it shouldn’t have a major impact on the market as 60 per cent of rentals are already at this standard,” he said. 

“Access to interest-free loans for maintenance to ensure your property is compliant is an additional cost but also a great way to grow both the capital and rental value of your asset.

“Properties that are not energy efficient lead to higher energy bills – which are already on the rise – but this initiative from the ACT government is something we will all benefit from, not just renters.” 

Minister for Energy and Emissions Reduction Shane Rattenbury said the new regulations would provide tenants with the level of comfort everyone deserved. 

“Many renters in the ACT live in housing that is not well insulated … it’s unfair that those with the least capacity to pay often live in properties that are the most expensive to heat and cool,” he said. 

“These minimum standards are essential for assisting renters with their quality of life and energy costs, and the phase-in period and no-interest loans will assist rental providers to satisfy the new requirements in a balanced way.

“Insulation is the most effective way to quickly improve energy efficiency in rental properties.”