More Australians than ever live in a property they don’t own – 31% of us, in fact, according to the most recent ABS estimates.

All those people can be considered renters, but not all have signed a lease. While the two words are sometimes used interchangeably, renting and leasing have slightly different meanings.

The distinction is legal as well as semantic, so it’s worth getting your head around. Particularly as, if you’re renting with a lease, your rights might be different to those without.

The difference between leasing and renting

What is leasing?

A lease is an arrangement that allows someone to use an asset owned by someone else for a set lease term.

For instance, if you’re leasing a car, it will still be owned by whoever you are leasing off, but you have right of use for the duration of the agreement.

When it comes to property, a lease is a contract that allows a tenant to live in someone else’s property for an agreed upon length of time. Leases commonly have six- or 12-month terms, but terms might be longer or shorter.

After you’ve signed a lease, you’ll have security and peace of mind. Unless you seriously violate the terms of the lease, you probably can’t be kicked out of the property during the term of the lease. (Though, leaseholder protections differ between states and territories, as we’ll get into shortly).

However, it also means you have an obligation to honour the lease. If you want to move out early, you’ll need to break the lease, which usually involves compensating the property owner.

What is renting?

Renting simply means paying to use someone else’s belongings.

If you’re living in a property that you don’t own, you are renting. Renting often goes hand-in-hand with a lease agreement, but not always. In some states for example, you can live in a rental property on a ‘periodic’, month-to-month arrangement.

Renting without a lease typically means the landlord can ask you to leave without cause, providing you're given the appropriate notice.

At the same time, it also gives you flexibility. If you spontaneously decide to pack up and move to Europe, it will be much easier without several months remaining on your lease.

Lease vs Rent

Any time you’re living in a property that you don’t own, you’re renting. A lease agreement is a formal agreement that allows a tenant to live in the property for a specified amount of time.

The two terms sounds pretty similar, but there are a few scenarios where you might be renting a property without a typical lease agreement:

  • Holiday lets: If you stay in someone’s Airbnb for a few days, for instance, a rental agreement contract exists, but it is not considered a lease.

  • Periodic rental agreements: In some states, you can sign a rental agreement that does not specify a fixed term, usually called a ‘periodic’ or ‘month-to-month’ agreement. This isn't a lease.

  • Subletting: If you are subletting (a tenant is renting out part of their property to you), there might not be a formal lease.

  • Temporary housing: People staying in government funded accommodation generally don’t have a lease.

Tenants rights: Leasing vs renting without a fixed agreement

Each state offers slightly different rights and protections to tenants who hold periodic or fixed rental agreements, as the table below shows:

NSW

Non-fixed rental agreement Fixed-term Lease
Rent increases Once in any 12 month period, with 60 days written notice If the lease is more than two years, rent increases are limited to once in any 12 month period.
When the lease is two years or less, rent can only be increased if it's specified as a term in the tenancy agreement.
How long tenants have to leave after an eviction notice (Breach of agreement) 14 days 14 days
How much notice landlords need to give for the tenant to leave (without a cause) 90 days 30 days before end of lease

Victoria

Non-fixed rental agreement Fixed-term Lease
Rent increases Once in any 12 month period, with 60 days written notice Rent can only be increased if the lease terms allow for it and specify how the increase will be calculated.
Limited to once every 12 months.
How long tenants have to leave after receiving an eviction notice (breach of agreement) Can be immediate or up to 28 days, depending on severity Can be immediate or up to 28 days, depending on severity
How much notice landlords need to give for the tenant to leave (without cause) In certain circumstances, where the landlord is moving back into the property, they can give just 14 days notice.
Most other cases require at least 60 days notice.		 If the lease term is less than six months, 60 days.
If the term is longer than six months, 90 days.

Queensland

Non-fixed rental agreement Fixed-term Lease
Rent increases Limited to once in any 12-month period, with increases tied to the property not the tenancy.
Owners must provide two months notice.		 Limited to once in any 12-month period, with increases tied to the property not the tenancy.
Owners must provide two months notice.
How long tenants have to leave after an eviction notice (breach of agreement) 14 days 14 days
How much notice landlords need to give for the tenant to leave (without cause) 2 months without grounds. If the property is being sold, 4 weeks. The later of 2 months or the end of the rental agreement

South Australia

Non-fixed rental agreement Fixed-term lease
Rent increases Once in any 12-month period, with 60 days written notice Once in any 12-month period, with 60 days written notice
How long tenants have to leave after an eviction notice (breach of agreement) 7 days 7 days
How much notice landlords need to give for the tenant to leave (without cause) 60 days 28 days before the end of the lease

Western Australia

Non-fixed rental agreement Fixed-term lease
Rent increases Once in any 6-month period, with 60 days written notice Once in any 6-month period, with 60 days written notice
How long tenants have to leave after an eviction notice (breach of agreement) 7 days 7 days
How much notice landlords need to give for the tenant to leave (without cause) 60 days 30 days before the end of the lease

Tasmania

Non-fixed rental agreement Fixed-term lease
Rent increases Once in any 12-month period, with 60 days written notice Once in any 12-month period, with 60 days written notice
How long tenants have to leave after an eviction notice (breach of agreement) 14 days 14 days
How much notice landlords need to give for the tenant to leave (without cause) 42 days 42 days before the end of the lease

Australian Capital Territory

Non-fixed rental agreement Fixed-term lease
Rent increases Once in any 12-month period, with 8 weeks written notice Once in any 12-month period, with 8 weeks written notice
How long tenants have to leave after an eviction notice (breach of agreement) 14 days 14 days
How much notice landlords need to give for the tenant to leave (without cause) 26 weeks 26 weeks before the end of the lease

Northern Territory

Non-fixed rental agreement Fixed-term lease
Rent increases Once in any 6-month period, with 30 days written notice Once in any 6-month period, with 30 days written notice
How long tenants have to leave after an eviction notice (breach of agreement) 7 days 7 days
How much notice landlords need to give for the tenant to leave (without cause) 42 days 14 days before the end of the lease

See also: A landlord's guide to rent increases by state

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