Housing Minister Phil Twyford has tabled a bill that would ban landlords passing letting fees onto tenants.
Mr Twyford said there was no justification for landlords passing the cost - which was often more than the equivalent of a week's rent - to tenants.
"Every year, government officials estimate $47 million is paid out in letting fees, charged by letting agencies or property management companies, to renters.
"The letting agencies are working for the landlord, but in this case they're charging the tenant and I don't think there's any good reason for it."
My Twyford said he expected to pass the legislation later this year.
He said the move was part of a broader review of the Residential Tenancies Act.
"This review will examine a range of changes to make life better for renters and will include looking at limiting rent increases to once per year. It will also consider other initiatives to improve security of tenure and better allow tenants to make their house a home. The review is expected to result in legislation being introduced to Parliament by the end of the year.
Mr Twyford earlier told RNZ it was time to modernise this country's tenancy laws, arguing New Zealand renters have fewer rights than any other country in the western world.