NSW Laws Target AI Edited Rental Property Photos

The NSW government is introducing new laws requiring landlords and real estate agents to disclose when they have used AI to deceptively alter pictures for property listings.

AI can remove trees, add decks, and make the grass greener. Photo: AVC

The Residential Tenancies (Protection of Personal Information) Amendment Bill 2025 will implement mandatory disclosure requirements for photoshopped and AI-doctored images on misleading rental advertisements.

As part of a broader push for tenant-friendly data privacy, the NSW government announced that landlords and agents must reveal when images have been modified to hide faults or otherwise mislead potential tenants.

If the legislation is passed, individuals could face penalties of $5,500, while businesses could be fined up to $22,000 for non-disclosure.

While the bill doesn't explicitly name AI, the government pointed to examples like using "artificially generated furniture" to show a double bed in a room only large enough for a single. It also specified that advertisers must disclose when they "digitally modifying photos" to cover up property damage.

The Tenants’ Union of NSW has voiced its support for the legislative changes. The union stated, "Growth of AI or digital manipulation has raced ahead in advertising of rental homes. [These changes] will provide better protections for renters personal information and help prevent renters applying for homes being misled when AI-generated photos are used in the advertisement.”

A before and after AI photo using Autoenhance.ai. Photo: Autoenhance.ai

The Rise of AI in Real Estate Advertising

Renters have long been wary of photo editing tricks and the use of fisheye lenses to make properties seem more appealing and spacious. However, the emergence of AI has introduced powerful real estate tools that can virtually furnish empty apartments, remove unwanted elements, and alter image perspectives within seconds.

It may not look like much before AI.... Photo: 4editor.com

But AI shows the room's potential. Photo: 4.editor.com

On the subreddit “r/shitrentals,” tenants in Australia have shared numerous examples. One NSW listing appeared to have an AI-generated sheen applied over mouldy ceilings. Another Queensland listing seemingly used an image generator to reimagine a dark kitchen, while a Victorian rental featured photos with obvious warping and cartoonish, AI-generated furniture.

An NSW Fair Trading spokesperson confirmed to Information Age that the agency has received reports of digitally altered images hiding property damage. Housing influencer Jordan van den Lamb, also known as Purplepingers, noted that the practice is now so widespread that there are no longer isolated examples to cite. He commented on seeing "countless rooms" enlarged or edited with AI to "smooth" surfaces that are actually "patchy, mouldy, or riddled with holes and cracks.”

Van den Lamb believes the new laws are insufficient, calling them "a concession where the NSW Labor government says ‘oh, I guess misleading advertising is fine as long as you admit you're doing it’." He argued, “Laws that prohibit misleading and deceptive conduct already exist federally – they should perhaps consider enforcing them.”

Applying Privacy Principles to Landlords

The new legislation also aims to curb the excessive collection of tenant data by applying the Privacy Act's Australian Privacy Principles directly to landlords and agents.

The Minns government is introducing a "standard rental application form" to define what information can and cannot be collected. This is part of a series of new privacy measures addressing the collection, use, and destruction of renters' personal data.

The government, which estimates that around 187,000 pieces of identification are gathered from NSW renters each week, stated the bill "will stop the unnecessary collection of extra personal information" and help "reduce the risk of identity theft and data breaches”.

“Renters shouldn’t have to trade away their privacy just to find a place to live,” said NSW Rental Commissioner Trina Jones. “This legislation will see sensible limits on what information can be collected in a rental application, creating a fairer and more consistent process, and gives rental applicants more control over their personal data.”

Penalties for violating these new privacy regulations are set at a maximum of $11,000 for individuals and $49,500 for corporations.