Houses for teachers and caretakers

Information about setting the rent, accounting practices and managerial responsibilities for the different types of school houses.

Level of compliance Main audience Other


  • Boards
  • Principals and Tumuaki
  • Teachers and Kaiako
  • Caretakers
  • Community Groups

Board management responsibilities for core and caretaker houses include collecting rent and dealing with tenants.

About school houses

In the past, we provided school houses to help schools to recruit teachers in areas where it was difficult to find housing. Some are still needed for this purpose, mainly in rural and isolated communities. However, as residential accommodation and transport have become more accessible, the need for such houses has decreased.

School houses are now classified as follows.

Core houses

Core houses are still needed to recruit and retain teachers at a school.

Since 2004, nearly all core houses have been transferred to board management. All houses built as ‘principal houses’ are core houses, regardless of their location.

Non-core houses

Non-core houses are generally situated in semi-urban (not remote) areas and /or where there is an established residential rental market within 50 kilometres of a population centre of at least 5000 people.

The non-core houses remain in Ministry of Education management, the Ministry takes responsibility for all costs associated with those houses. Non-core Houses are being progressively disposed of through the Crown, in accordance with the requirements of the Public Works Act.

Caretaker houses

Some schools also have caretaker houses. The Ministry originally provided them at schools where it was hard to get trades people or security was needed.

Managing core houses

Boards now manage nearly all core houses. If your school has a core house then you're the landlord. Your responsibilities as landlord include:

  • ensuring the school complies with all current, relevant legislation for residences 
  • finding tenants
  • carrying out property inspections
  • collecting the bond and rent
  • reviewing the rent each year
  • managing tenancy disputes
  • paying for all operating costs, including rates and insurance.

You must also arrange and pay for maintenance work and capital upgrades to keep the house safe and healthy for tenants. These responsibilities include:

  • general maintenance — all external and internal painting, interior and exterior lining and cladding, pathways
  • modernisation and upgrades, such as partially or fully refurbishing the bathroom and kitchen
  • keeping a reserve for major upgrades and health and safety work on the house.

Accounting for core houses finances


Set aside depreciation for all capital and maintenance work.

Depreciation is the way that accountants measure the house losing value every year from wear and tear. We recommend you depreciate core houses up to a 50 year maximum lifetime. This means that the house should lose up to one-fiftieth of its value in your asset register every year. You can only depreciate buildings — there's no depreciation on the land.

Depreciation: How to spread the cost of your assets – Inland Revenue website(external link)

In the case of GST, you:

  • can't claim GST on the expenses for the house record house expenses as GST inclusive
  • must not include GST in the rent charge for the house.

Under the Education and Training Act 2020, boards don't have to pay tax on profit from income. This includes profit from rental income from school houses.


We don't insure board managed core houses.

You must insure your core houses at replacement value using an insurance company of your choice.

If an uninsured core house is destroyed you don't have to rebuild it, and we won’t replace it either.

Setting the rent for a core house

You must set the rent for your core house at market value.When setting or reviewing the rent, consider the:

  • condition of the house
  • location of the house
  • comparable current market rents for the area
  • need to keep the rent at a fair level
  • need to cover expenses, including maintenance and rates
  • advice from a valuer or real estate agent on market rents.

Rental discount for a teacher or principal

A teacher or principal gets a 25% discount off the current market rent for a school house. This is known as a ‘service tenancy’ and is authorised under section 562.

Section 562, Education and Training Act 2020 – NZ Legislation website(external link)

The discount applies to all registered teachers and principals on the Ministry’s payroll who are living in a school house (core or non-core). This includes:

  • a teacher teaching at one school but living in another school’s house
  • teachers or principals at integrated schools living in a state school’s house.

It doesn't apply to:

  • private tenants
  • non-registered teachers or tutors
  • teachers at private schools.

Under a service tenancy, the house is provided to the teacher or principal as an ‘incident’ of their employment. This means the job comes with a house if the teacher wants it, but it is not a condition of their employment. That is, you don't have to supply a house with the job.

PAYE tax exemption

Any employee receiving a benefit, such as lower rent, as an incident of their employment, would normally pay Pay As You Earn (PAYE) tax on that benefit. However, Inland Revenue provides an exemption to teachers and principals in school houses. It recognises that they often need to move to different locations, including rural areas that have little choice in residential rental properties.

You must keep rents for teachers and principals at 75% of market rent. If the rent is not adjusted to reflect increases in local market rent rates, it may become less than 75% of market rent. The tenant will then be getting a discount higher than 25% and may become liable for PAYE tax.

How tenants should pay their rent

The best way for tenants to pay their rent is by automatic payment to your designated bank account. Include the payment method as a term in the tenancy agreement.

What to do if a tenant objects to a new rent

A tenant might object to a new rent and ask you to reassess it. In this case:

  • under the Residential Tenancies Act 1986, the tenant must give you some evidence of market rents in the area, taking into account the condition of the house
  • you reassess the rent and advise the tenant of your decision
  • if the tenant is still not happy, they can apply to the Tenancy Tribunal for another assessment.

What to do if a tenant doesn't pay the rent

If a tenant doesn’t pay the rent and gets into arrears, write to them requesting payment.

If this is unsuccessful, ask for help from MBIE's Tenancy services website.

Tenancy Services website(external link)

Letting core houses as short-term holiday accommodation

You can rent empty core houses as short term holiday accommodation during school holidays.

Under the Residential Tenancies Act 1986 a short term tenancy of less than 120 days isn't subject to market rent or minimum notice periods. You can maximise your rental income by renting vacant houses as short term holiday accommodation and charging a daily or weekly rate.

Residential Tenancies Act 1986(external link)

Before you decide on this option:

  • consider the costs for cleaning, damage to furniture and so on
  • carefully research legal requirements for holiday accommodation.

Rates and rental income

Core house rental income

You keep any rental income from your core house. However, you must use it, first, to fulfil your landlord responsibilities, and after meeting those responsibilities, for other school expenses.

Our Housing Cashflow Model  will help you budget rental income and expenses. Enter your rental income and expenses into the model to automatically generate the cash flow.

Housing Cashflow Model [XLS, 32 KB]

Include your planned house maintenance as a board-funded item in your 10 Year Property Plan (10YPP).

Paying rates on core houses

What rates you pay depends on whether the tenant of your core house is:

  • a teacher or principal — in this case, you pay service rates, for example water rates, but are exempt from general council rates
  • a private tenant — in this case, you must pay full rates.

Talk to your local Ministry office if you have any problems with rates charged by your council.

Local Ministry office

Paying for work on core school houses

We don't fund board managed core houses for maintenance or capital costs. If the rental income falls short, you can pay for work on the house with:

  • your school’s operational funding for house expenses but only if you have first met all the other operating costs for the school
  • board funding, like fundraising and grants.

Property Maintenance Grant for school maintenance work

Board funding for property projects

Managing non-core houses

As a board, you have no financial or legal interest in non-core houses. Instead:

  • the Ministry of Education owns all non-core houses
  • Land Information New Zealand (LINZ) manages the non-core houses. It has contracted a National Housing Contractor for this task.

Some core houses, including new core houses, are also managed by LINZ.

The National Housing Contractor:

  • finds the tenants
  • arranges all property work, including inspections, maintenance and capital upgrades
  • collects the bond and rent and organises the annual rent reviews
  • manages tenancy disputes
  • pays all operating costs, including rates, on behalf of the Ministry
  • invoices the Ministry for all costs.

Managing a caretaker house

As a board, you're responsible for managing your caretaker house. This has the same responsibilities as for managing a core house.


You don’t need to arrange or pay for insurance on a caretaker house. But we will not replace a caretaker house if it's totally destroyed. This is because provision of caretaker houses is historical and we now have no policy to provide new ones, or to replace old ones once they have passed their useful life or become uninhabitable.

But we may, at our discretion, fix damage using Ministry funding.

Setting the rent for a caretaker

Historically, rents for caretaker houses have been very low. This recognises that the caretaker often has to live on site to keep the school secure. This is especially important for rural and isolated schools.

You negotiate the rent as part of the caretaker’s employment contract. You may undertake the negotiations with either:

  • a union representative, if the caretaker is a union member and you need them to occupy the house as a condition of their employment
  • the caretaker directly, if they're not a union member.

Inland Revenue has ruled that low rents are an accommodation discount and part of the caretaker’s salary package. This means that the caretaker must pay PAYE tax on the discount. We have an agreement with Inland Revenue on how the benefit is taxed, and process it through our payroll.

Setting the rent for other tenants

Where the tenant of a caretaker house is someone other than the caretaker, the rent should be set as for core housing.

Paying rent to the National Housing Contractor

You must pay all rent from your caretaker house to the Ministry’s National Housing Contractor, who then pays it to us. Unlike a core house, you can't keep the rent because you receive Ministry funding for its maintenance and capital upgrades.

Paying for work on a caretaker house

You're responsible for maintaining your caretaker house to keep it in good condition. You must:

  • pay for it from your Property Maintenance Grant, in the same way as other school property
  • plan for routine maintenance on the caretaker house in your 10YPP.

You may find your caretaker house needs essential capital upgrades, such as a new roof, to keep the tenant healthy and safe. If so, talk to your Ministry property advisor about funding. They'll assess whether you have maintained the house adequately.

  • If routine maintenance has been neglected, and costs to bring the house to standard are too high, we'll consider demolishing or disposing of the house.
  • If the work is practicable, your property advisor will seek Ministry funding on your behalf.

We will not pay for non-essential capital upgrades such as remodelling a kitchen. You must budget for this work using board funding, such as fundraising and grants.

Seeking Ministry funding for a new or replacement school house

In limited circumstances, we may give you funding to build a new house or replace an existing one. Talk to your property advisor about how to make a submission for this funding.

We'll only provide funding for a new or replacement house if your school and area meet all of the following conditions.

  • The school is more than 30 kilometres from a population centre (more than 5000 people).
  • Driving conditions to get to the school are difficult, for example, involving gravel roads or long distances.
  • Rental houses available in the area is limited.
  • There are more full time equivalent (FTE) teaching positions than the number of properties available.
  • The teaching positions are stable in terms of the school’s long-term roll.
  • If you're looking for a replacement, the existing house has come to the end of its economic life.

Healthy Homes Standards

Boards are responsible for ensuring all core and caretaker housing meet the Ministry of Housing and Urban Development Healthy Homes Standards. These standards cover improvements to heating, insulation, ventilation and moisture ingress.

Healthy Homes Standards – Ministry of Housing and Urban Development(external link)

New core houses are Ministry-managed

A new house is considered a 'core house'.

But unlike for other core houses, we will manage the new core house.

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