Parliament passes law banning letting fees

Parliament has officially changed the law to ban tenants being charged letting fees when moving into a new property.

The fees, typically one week's rent plus GST, were collected by landlords and listing agents at the beginning of any new tenancy.

Housing Minister Phil Twyford said it was simply too much to expect from people when they're in the middle of moving house.

"This will make a real difference to struggling families. There are significant costs associated with moving to a new rental property, which many families are now forced to do every year," he said in a statement.

"When moving into a new rental property, tenants can face up to four weeks' bond, two weeks' rent in advance  and one weeks' rent as a letting fee  in addition to moving costs.

"With homeownership rates at a 60-year low, this change recognises that we need to take action now to make rent more affordable so people can save to buy their own home.

Mr Twyford said the law had been changed now in time for summer, when the most tenancies tend to turn over.

It will come into effect on December 12.

National and ACT did not support the Bill and said it will lead to higher rents for tenants.