A “portable bond” is a proposed reform designed to ease the financial pressure on tenants when they move from one rental property to another. At the moment, tenants usually need to pay a new bond that is typically equal to four weeks’ rent before they can move into their next rental digs – and even when their existing bond is still tied up with their previous tenancy.

For many younger Australians, this can be a financial nightmare, as a rental bond is often one of the largest upfront financial commitments they face—meaning coming up with another bond while waiting for the previous one to be refunded can be a real challenge.

Portable bond schemes aim to solve this problem by allowing tenants to transfer their bond from one tenancy to another, rather than paying a second bond upfront. In simple terms, the bond held by the relevant authority, such as the NSW Rental Bond Board through NSW Fair Trading, could move with the tenant when they secure a new lease.

Moreover, if the bond required for the new property is higher, the tenant would simply top up the difference. If the bond required is lower, they could receive a partial refund once the previous tenancy is finalised and any deductions for repairs have been accounted for.

The overall aim of a portable bond is to make moving between rental properties smoother and less stressful. Moving home already comes with costs such as removalists costs and utilities connection fees, and often the purchase of new household items. So, having to find another four weeks’ worth of rent for a bond can be extra difficult in these circumstances, particularly now that rents across Australia are high.

A portable bond would also allow tenants to digitally transfer their bond between properties. This will help to sidestep delays caused by waiting for your previous landlord to approve the release of a bond before lodging a new one. This sounds like a small improvement, but it will reduce both financial pressure and administrative hassle that tenants regularly face when switching from one rental to the next.

At this stage, the reforms are still being developed in our states and territories, so tenants should check the latest rules in their jurisdiction or speak with their property manager about how to manage their bond obligations when planning a move.

For more tips on managing a bond transfer, contact your local Raine & Horne Property Manager.