Everything You Need to Know About Rental Bonds

This type of bond usually costs a large amount of money to pay upfront, typically the equivalent of four weeks' rent, and sometimes even more!

So, what exactly is a rental bond used for, and why do most real estate agents ask for one? More importantly, how are you meant to pay for one?

We’ve collated some of the most frequently asked questions about rental bonds and answered them in detail below.

On this page:

• What is a rental bond?
• Who holds the rental bond?
• How much does a rental bond cost?
• When and how do you get your rental bond back?
• What happens if there is a dispute on a bond claim?
• Tips to avoid bond disputes
• Other moving costs

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What is a rental bond?

A rental bond is a lump sum security deposit paid by renters to either the property manager or the landlord at the start of a tenancy agreement. The bond protects the property owner against any potential losses caused by renting out the property. A common use of bond funds is to pay for repairs, for example. 

Rental bonds are not usually mandatory, but most landlords or property agents ask for one when renting to new tenants.

Who holds the rental bond?

While it is the landlord or agent that requests and handles the paperwork of the bond, they don’t typically hold the money. It is often held by the relevant state government in a bond trust, with the exception of the Northern Territory. 

Rental bonds must be lodged with the respective state or territory bond administrator within the specified timeframe. Here’s a quick rundown of each state or territory’s bond administrator:

State	Bond Administrator
Australian Capital Territory	Office of Rental Bonds
New South Wales	NSW Office of Fair Trading
Northern Territory	Landlord or property manager
Queensland	Residential Tenancies Authority (RTA)
South Australia	Consumer and Business Services (CBS)
Tasmania	Rental Deposit Authority (RDA)
Victoria	Residential Tenancies Bond Authority (RTBA)
Western Australia	BondsOnline (Consumer Affairs Bond Administrator)

How much does a rental bond cost?

The cost of a rental bond will vary depending on a number of factors, primarily:

• Your weekly rent
• Your state/territory of residence

Looking at recent rental data from Domain, we can see that the median weekly rent in each state and territory’s capital city is as follows:

Median Weekly Rent in Capital Cities

City	Houses	Units	Combined
Sydney	$750	$700	$725
Melbourne	$570	$550	$560
Brisbane	$620	$590	$605
Adelaide	$590	$460	$525
Perth	$650	$550	$600
Hobart	$550	$460	$505
Canberra	$685	$570	$628
Darwin	$650	$550	$600

Source: Domain March 2024 Rental Report. Combined rent figures rounded to the nearest dollar.

Each state and territory has its own rules and regulations around how much a landlord can charge for a bond, but the common maximum is four weeks’ rent upfront. You could also be asked to pay an extra two weeks’ rent in advance, but this isn’t allowed in some areas. 

Looking at the median rent figures above, here’s what the typical rental bond could look like in each state and territory, assuming the property owner asks for four weeks’ rent upfront: 

Average Rental Bond Per Capital City

City	Rental bond (4 weeks’ rent)	+2 weeks’ rent
Sydney	$3,000	$4,500
Melbourne	$2,280	$3,420
Brisbane	$2,480	$3,720
Adelaide	$2,360	$3,540
Perth	$2,600	$3,900
Hobart	$2,200	$3,300
Canberra	$2,740	$4,110
Darwin	$2,600	$3,900
Average	$2,532.50	$3,798.75

Accurate as of May 2024.

On average, you could expect to pay over $3,000 per property to secure your spot and move in. Thankfully, you can get that money back at the end of your lease, but it’s still a lot of money to have to part with in one go.

When do you get your rental bond back?

Rental bonds are released at the end of your tenancy agreement or when you vacate the property. Generally, in order to ensure you receive the entire amount of your bond back, a tenant needs to ensure:

• There is no rent owing;
• There is no damage to the property;
• The property is left in a clean and tidy condition;
• A detailed condition report is provided.

What can the landlord claim the bond for? 

Tenants not getting their bonds back is a common occurrence. According to NSW Fair Trading, approximately 25% of tenants in Australia do not get their full bond back when moving out of a rental property. A 2020 survey by Rent.com.au meanwhile found that 30% failed to get their full bond reimbursed.

If you leave the property in the same condition it was when you moved in, you should receive your total rental bond amount back. There are cases in which the landlord or agent can claim against your rental bond, including:

• Rent arrears (unpaid rent);
• Damage to the property caused by the tenants or guests of the tenants;
• Cleaning expenses (if the property was not left in a sufficiently clean condition);
• Abandonment of the premises;
• Loss of goods;
• Any other reimbursement.

There are assurances in place to (hopefully) prevent any disputes, including condition reports. In most states and territories, tenants are required to complete both an Entry Condition Report and Exit Condition Report. 

In this process, tenants must inspect the property based on photos to ensure that the provided information is accurate. If there are any discrepancies, there are sections of space in the report for the tenant to make notes.

What happens if there is a dispute on a bond claim?

As the figures above show, it’s pretty common for landlords or property managers to make a claim for some or all of the rental bond(s).

While there are plenty of legitimate reasons to withhold a bond from a tenant, there are plenty of ways you could feel hard done by if you’re moving out of a rental property.

If this happens to you and you feel the claim against your bond is unjustified, there are procedures in place with the relevant government offices. All parties will be required to follow the dispute resolution process to reach an agreement.

Check out our state-by-state rental bond pages at the end of this article for information on the relevant legislation you can check out for help disputing a bond claim.

Tips to avoid bond disputes

There are things that you can do to actively avoid any future disputes or claims on your rental bond. If there is a case in which an unjust claim is made against your bond, these tips can help you defend yourself:

• Ask for a receipt after your bond has been lodged with the relevant government body;
• Inspect the property thoroughly when filling out the Entry Condition Report (the more photos, the better);
• Read all of your documents carefully, and don’t sign anything until you fully understand all of them;
• Keep copies of your receipts for bond and rent payments;
• Give written notice before you vacate the premises;
• Leave the premises clean. Consider hiring a bond cleaner to ensure that the property is left in sufficient condition. Make sure you keep your receipt for any cleaning or pest control completed;
• When you are moving out, take photos of the premises;
• Return all keys you were given when you vacate. If you lose any keys, ensure you let the landlord know so you can pay to have them replaced;
• Keep records of any maintenance requests you submit, and
• Keep copies of any quotes or receipts for work carried out at the property.

Other moving costs

When moving to a new property, there are other costs to consider beyond just the bond. In fact, the bond can account for less than half of the total cost of moving when you factor in things like removalists and buying new furniture. 

According to the 2022 Muval Index, the average cost of moving house in Australia is $3,000. Of that $3,000, an average of $1,581 was spent on removalist costs, and $1,451 was spent on additional expenses such as boxes, cleaning, and packing services.

When you factor in all of these expenses, moving to a new rental property could cost more than $6,000, including the rental bond itself.

What if you can’t afford to pay your rental bond upfront?

As you can see, moving is expensive enough already without the added cost of a rental bond. Fortunately, there are other options you may wish to consider depending on your circumstances:

Bond instalments

You can ask your landlord to pay your rental bond in instalments until the full bond amount is paid. The landlord must follow the relevant procedures to notify the governing body of your bond payment.

Government help

According to ASIC, state and territory governments offer interest-free loans to help people on lower incomes pay their rental bonds:

Australian Capital Territory	Rental Bond Help
New South Wales	Rentstart Bond Loan
Northern Territory	Help with set-up costs for a private rental
Queensland	Guide to Bond Loans and Rental Grants
South Australia	Help paying bond and rent
Tasmania	Private rent assistance
Victoria	RentAssist bond loan
Western Australia	Bond Assistance Loan Scheme

These loans aren’t available to everyone, however. You generally need to meet specific criteria, such as earning below a certain income and having less than a certain amount (e.g. $10,000 in the ACT) in savings or assets.

Rental bond loans

Another option available if you can't access either of the above is a Rental Bond Loan, which is just a personal loan to pay for your rental bond in instalments plus interest.

At Jacaranda Finance, we offer fast, flexible and affordable Rental Bond Loans starting from $3,000, with loan terms as short as 25 months. 

If you need funds quickly to secure your next rental property, you can apply in as little as 5-12 minutes¹ and receive an outcome on the same day². Even better, you can check if you qualify beforehand without impacting your credit score at all.

Rental bond loans by state

See below for more detailed information on how rental bonds work in each state/territory, or click here if you’re ready to get started on an application!

• NSW Rental Bond Loans
• VIC Rental Bond Loans
• QLD Rental Bond Loans
• TAS Rental Bond Loans

 

• WA Rental Bond Loans
• SA Rental Bond Loans
• NT Rental Bond Loans
• ACT Rental Bond Loans