Letting fees will now become a thing of the past, with Parliament passing legislation doing away with them today.
The change will take effect from 12 December.
Housing Minister Phil Twyford said the new law could put up to $47 million back into the pockets of Kiwi families each year.
He said the law was changed in time to give tenants a break before the country enters the summer rental season when many tenancies turn over.
"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.
"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 letting fees were unfair and had no economic rationale.
"There is no relationship between the amount of the charge and the cost of the services provided."
He said New Zealand's tenancy laws were antiquated and did not recognise that renting was a long term reality for many families.