Reference only. This article sets out general information about the residential tenancy rules of New South Wales, drawn from the public sources listed at the end. It is not legal, financial, taxation or credit advice, and it is not a recommendation to buy, sell, or structure a transaction in any particular way. Tenancy law changes often and individual circumstances differ. Readers must verify every point below directly with the relevant authority and obtain their own professional advice before relying on any of it.
The lease survives the sale, but in NSW it is thinner than you think
Buy a house in NSW with a tenant in it and you buy the residential tenancy agreement along with it. Same rent, same bond, same end date. On settlement day you become the landlord.
The second half of the story is what makes NSW worth reading carefully. In every other state and territory covered in this series, the published guidance says plainly that a sale cannot cut a fixed term short. In NSW the published guidance on the actual sale ground is less clear cut, and the notice period attached to it is much shorter at 30 days. That is why a NSW tenanted purchase needs specific advice rather than a general rule of thumb.
What this does to your finance
Purpose sets your rate. Settle with a tenant in place and most lenders will price the loan as an investment loan, even if you intend to move in when the lease ends, because the property produces income from day one. Investment rates sit above owner-occupier rates. Tell your broker the actual plan up front so the application is structured for it and you know what a later switch involves.
A signed lease can lift your borrowing capacity. Lenders can use documented rent as income, usually shading it to around 70 to 80 percent to allow for vacancy and costs. That is still better than an assumed figure on an empty property. See our investment loan page, or model it with the borrowing power calculator.
Vacant possession clauses move settlement dates. If the notice period is miscalculated, settlement shifts, and a shifted settlement means re-issued approvals and possibly an expired rate lock. Settlement timing and loan approval validity therefore interact.
Case 1: You want to keep the tenant
The straightforward one. The agreement transfers to you untouched.
What comes with the property:
- The rent, at the agreed amount. You cannot reset it at settlement, and any increase has to follow the normal rules and notice.
- The bond, held by NSW Fair Trading through Rental Bonds Online. It stays where it is, and the record is updated to show you.
- The condition report, the fixed term end date, and any pet or maintenance arrangements already agreed.
Documents commonly requested during due diligence:
- The signed residential tenancy agreement, with the fixed term end date.
- The rental bond number and confirmation of the amount held.
- The current rent, the date it was last increased, and the payment history.
- The ingoing condition report.
- Any unresolved repair requests or NCAT matters.
That last point matters: an NCAT application in progress becomes yours.
At settlement, rent is apportioned between you and the vendor like rates and water, so you get the portion covering the days from settlement onward. The tenant must be told in writing who the new landlord is and where to pay rent.
Case 2: You want vacant possession
Getting the ground wrong here costs months.
Since 19 May 2025, no grounds evictions are unlawful in NSW. A landlord now needs a valid reason. There are two sale-related grounds, and they are not interchangeable.
Ground one: the property has actually sold
If a contract for sale has been entered into and it requires vacant possession, the notice period is 30 days. On the fixed term question the Tenants' Union factsheet states that in the case of actual sale the landlord must give at least 30 days notice "to end a fixed-term or periodic agreement", while a separate heading in the same factsheet, "No eviction during a fixed term", says the termination date to end a fixed-term tenancy must usually be on or after the last day of the agreement.
This is the single point in this article most worth verifying directly, because the two readings produce very different settlement dates. NSW Fair Trading on 13 32 20, or a solicitor or conveyancer acting on the purchase, can confirm which applies to a specific agreement.
The landlord has to back it up with evidence: a copy of the executed sale contract, or a written statement from the solicitor or conveyancer handling the transaction, showing that vacant possession is contractually required.
This is the ground that matters where a buyer intends to occupy, and the one whose fixed term operation is described inconsistently in the published guidance.
Ground two: the property is being offered for sale
If the property is merely on the market and no contract exists yet, the notice periods are much longer and the ground is much weaker:
- Periodic agreement: 90 days
- Fixed term over 6 months: 90 days
- Fixed term of 6 months or less: 60 days
And critically, this ground cannot be used until after the fixed term expires. Evidence required is a copy of the proposed sale contract or the agency agreement.
What this means in practice
The notice must be served by the landlord, which at that point is the vendor, not you. If you settle first and then decide you want the tenant out, the sale ground is gone. You did not sell anything. You would be starting over on a different ground with its own clock.
The practical consequences are that the notice period runs from service rather than from settlement, and that a notice described as intended is not the same as a notice served. How vacant possession is dealt with in the contract, and what evidence of service is provided, are matters for a reader's conveyancer or solicitor.
Two more points. Re-letting exclusion periods differ by ground: the Tenants' Union factsheet records 6 months for proposed sale, for a landlord or family moving in, and for demolition, but does not apply that period to actual sale. And NSW applies significant penalties where a termination notice relies on a ground that is not genuine, or where supporting evidence is false or misleading. From 1 July 2025 landlords and agents must also register the reason for every eviction, and the evidence used, with the NSW government. None of this is a buyer's obligation, but a vendor's notice does have to be genuine and documented.
One procedural detail that shifts dates: if a termination notice is posted, an extra 7 working days must be allowed for delivery.
The stamp duty trap
If you are a first home buyer using the First Home Buyers Assistance Scheme, you must move into the home within 12 months of settlement and live there as your principal place of residence for at least 12 continuous months.
A tenant with a long fixed term can eat that window before you get the keys. Revenue NSW can allow a shorter period or waive the requirement in exceptional circumstances, but that is a written application and a discretion, not a plan.
Our stamp duty calculator can be used to see what duty applies at a given purchase price. Eligibility, current thresholds and the exact residence conditions must be confirmed with Revenue NSW.
Case 3: The tenant wants out early
The Tenants' Union of NSW factsheet distinguishes two situations, and the difference matters to anyone relying on the rent.
Periodic agreement: a tenant who has received a termination notice can end the tenancy at any time before the termination date, simply by giving vacant possession. No notice to the landlord is required at all. Rent stops from the day they move out and return the keys.
Fixed term agreement: a tenant who has received a termination notice may leave before the termination date by giving a 14 day early exit notice. Rent stops from the day stated in that notice, which is also the day they give vacant possession. An early exit notice cannot be given where the tenancy was terminated for breach, or because the premises are unusable.
So a 30 day notice does not guarantee 30 more days of rent. On a fixed term it can become 14, and on a periodic agreement it can become none.
For a buyer seeking vacant possession that shortens the wait. For a buyer relying on the lease as income, it means a tenancy already under notice may not run to its stated end date. Whether a notice has already been served is a question a reader's conveyancer or solicitor can put to the vendor.
Case 4: You keep the tenant but want to increase the rent
An inherited rent is not a rent you can reset. NSW Fair Trading states that after an increase the landlord must wait at least 12 months before another one, and must give the tenant 60 days or more written notice before the increase takes effect. The notice must state the proposed new rent amount rather than the amount of the increase, state the date it becomes payable, and be signed, dated and properly addressed.
The 12 month rule applies to periodic agreements and to fixed term agreements, with one exception: fixed term agreements of less than 2 years that began before 13 December 2024.
The clock runs from the last increase, not from settlement, so a landlord who raised the rent shortly before listing has started a clock the buyer inherits.
Case 5: The lender is selling, not the owner
Where a lender is taking back the property because the landlord has stopped paying the loan, the Tenants' Union of NSW notes that certain other rules may apply and directs readers to separate guidance on mortgagee repossession rather than to the ordinary termination grounds.
A mortgagee sale is therefore not a case this article can answer from the ordinary sale grounds. If the property is being sold by a mortgagee in possession, the position must be confirmed with NSW Fair Trading on 13 32 20 or with a solicitor before assuming the tenancy works the way an ordinary sale does.
Case 6: Access, inspections and quiet enjoyment
NSW attaches specific obligations to showing a tenanted property to buyers.
- The landlord must give the tenant written notice of the intention to sell not later than 14 days before the premises are first made available for inspection by prospective purchasers.
- The landlord, or the agent for the sale, must make all reasonable efforts to agree with the tenant on the days and times the premises will be periodically available for inspection.
- A tenant is not required to agree to the premises being available for inspection by prospective purchasers more than twice a week.
That second point is an obligation to negotiate rather than a right to dictate, which is why access to a tenanted NSW property is often slower than a buyer expects.
Inspections are harder on an occupied property. A tenant's furniture obscures parts of it, which is why building inspections and the ingoing condition report are the usual reference points for buyers assessing condition.
Case 7: Bond, arrears and disputes carried into settlement
None of this resets at settlement.
- The bond stays with NSW Fair Trading through Rental Bonds Online, with the record updated to show the new landlord.
- The ingoing condition report remains the benchmark for assessing the property when the tenant leaves.
- Arrears and damage do not reset. A tenant can make a written request for a rent ledger, which the landlord or agent must provide within 7 days, and that ledger is the record of what has actually been paid.
- NCAT matters already on foot continue. An application in progress does not settle when the property does.
Where to check this yourself
Every figure above comes from one of these, all reachable at the time of writing.
Regulator and tenancy services
- NSW Fair Trading (13 32 20), and its page on ending a tenancy
- NSW Government guidance on minimum notice periods for ending a residential tenancy, a landlord ending a tenancy and when and how rent can be increased
- Tenants' Union of NSW, and its factsheets on eviction and rent increases. The eviction factsheet is the source of the two sale grounds and the early exit rules above
- NCAT tenancy disputes, the tribunal
Legislation
The Residential Tenancies Act 2010 (NSW) is published by the NSW Parliamentary Counsel's Office at legislation.nsw.gov.au. That site blocks automated access, so no direct link is given here; search the site for the Act by name.
Duty
Dates these rules took effect
Everything above is stated as at September 2026 and is drawn from Residential Tenancies Act 2010 (NSW) and the public guidance of the authorities named below. Tenancy rules in New South Wales have changed more than once in recent years, and a figure quoted from an older article, an agent's recollection or another state will often be wrong.
No grounds evictions became unlawful on 19 May 2025. From 1 July 2025 landlords and agents must register the reason for every eviction, and the evidence used, with the NSW government. The 12 month rent increase rule applies except to fixed term agreements of less than 2 years that began before 13 December 2024. The Tenants' Union of NSW eviction factsheet relied on here is dated August 2025.
Readers checking a specific transaction should confirm the current position with NSW Fair Trading (13 32 20), the Tenants' Union of NSW and NCAT, and should note the date on which any guidance page they rely on was last updated.
The short version
| Situation | The NSW rule |
|---|---|
| You keep the tenant | Lease, rent, bond and condition report all transfer to you unchanged |
| Contract requires vacant possession | 30 days notice. Whether it operates during a fixed term is the point to verify with NSW Fair Trading |
| Property merely offered for sale | 90 days (or 60 days on a short fixed term), and only after the fixed term ends |
| Tenant wants to leave | Fixed term: 14 day early exit notice. Periodic: no notice required at all |
| You want to raise the rent | 12 months since the last increase, 60 days notice |
| The lender is selling | Different rules may apply. Not answered by the sale grounds above |
| Showing buyers through | Notice of intention to sell 14 days ahead; tenant need not agree to more than twice a week |
| Bond, arrears, disputes | Nothing resets at settlement. Rent ledger must be provided within 7 days of a written request |
The NSW-specific issue is that the fixed term question is not settled by a quick read of the published guidance, and the two possible answers are months apart. It is a question to resolve before exchange rather than after.
If you would like to discuss the finance side of a purchase like this, you can contact us.
Buying in another state? The rules change completely at the border. See the same guide for Victoria, Queensland, South Australia, Western Australia, Tasmania, the Northern Territory and the ACT.
This article covers New South Wales only and was prepared in September 2026. Residential tenancy law, duty concessions and lender policy all change, and the position may have moved since publication. Nothing in this article is legal, financial, taxation or credit advice, it does not take account of any reader's objectives, financial situation or needs, and no reliance should be placed on it. Readers are responsible for confirming the current rules directly with NSW Fair Trading, NCAT and Revenue NSW, and for obtaining their own legal, conveyancing and financial advice before acting.
