Smart Rental Bonds - are Portable Bonds finally here?

The Tenants' Union of NSW today welcomed the NSW Government's announcement that its Smart Rental Bonds scheme will be tested ahead of a mid-2026 launch, but called on the Government to scrap the $25 user fee — a charge that will fall hardest on the renters the scheme is designed to help.

The Tenants’ Union first proposed a version of the portable bonds scheme in 2018, in response to the growth of ‘bond alternatives’ and high-interest loans that renters were being forced on to in order to cover a second bond while waiting for the first to be returned. This is a reality faced by many of the 330,000 households who move each year in NSW despite the vast majority of renters receiving all or part of their bond back. 

The Smart Rental Bonds scheme directly addresses that problem, and is very welcome. The Tenants' Union has long urged successive Governments to ensure its implementation and recognises the work of the Rental Commissioner and the Minns Government as its launch grows closer. Average moving costs are many thousands of dollars and with the median length of tenure for renters in NSW still below two years, this makes moving a significant expense as well as a stressful time.

Therefore the Tenants’ Union does not support the $25 charge that has been announced to support the scheme. Renters have $2.3bn of their money held by the Rental Bond Board and the returns on that money would be able to support this scheme as well as increase much needed funds for the Tenant Advice and Advocacy Program to ensure renters can navigate the bonds system with advice and support. The NSW Government should commit to ensuring the bonds are being invested sensibly and effectively but this does not appear to be happening currently with returns from NSW Treasury barely above inflation.

The $25 fee is a disproportionate burden on lower income renters. For a renter of a $400 pw apartment, the charge is an additional 1.5% of the total bond while higher income renters pay a significantly lower percentage - despite carrying the higher financial risk. This fee is particularly jarring in the context of other reforms to ease the costs borne by lower income renters like ensuring fee-free options to pay rent - a reform the Tenants’ Union strongly supports.

The Tenants’ Union calls on the NSW government to reconsider this charge or at least waive it for recipients of pensions and income support. With the growth in digital government this is an easy and inexpensive check to carry out.

We also recognise the scheme creates no difficulty for landlords and agents for whom the government has planned extensively to ensure no increased risk or process. The only people who might find their practices are changed are any landlords or agents who routinely claim bonds without evidence or justification. Tenants who are no longer as desperate to agree to any claim in order to recoup the majority of the bond in the rush of moving will no longer have this pressure hanging over them. The Tenants’ Union recently released the Rental Bond Kit which helps guide renters through the process of protecting their bond.

Leo Patterson Ross, CEO, Tenants’ Union of NSW said:

“The portable bonds scheme is something we proposed and secured legislative reform for in 2018. Its upcoming launch is genuinely good news for NSW renters. But a $25 fee on people who are already stretched thin is the wrong call. Renters fund the bond system and supports through the interest on their bonds. They should not be charged again just to move their own money from one tenancy to the next. We call on the Government to make the bond transfer fee-free before the scheme launches."