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NRAS

NRAS – What is it?

The NRAS scheme offers a $9,140 cash free of tax incentive every year over 10 years and each year this is raised by the rental element of the CPI.

This inducement has 2 main policy objectives. The first one is to encourage the stock of new affordable rental housing coming onto the housing market and the second is to increase affordability for any eligible households. To be acceptable for NRAS, new homes must be to be let out to eligible households at a reduction of no less than 20 percent of market rental rates. Eligible households are deemed those on low or moderate incomes; however this program should not considered to be a social housing scheme.

Appropriate dwellings may vary from larger family homes at over $400 per week through to studio apartments for under $200 per week. These rents are indexed each year by the rental component of CPI for the relevant state capital.

The tax free incentive is for each home, every year, over 10 years and the incentive is given out to the eligible property owners at the close of each tax year in 2 separate amounts; three quarters is credited on the investor’s tax return by the Federal Government with another quarter being given out by the State Government as cash each year.

What do they hope to achieve?

The NRAS Scheme is anticipated to;

Give greater than normal earnings for investors in the residential marketplace.
Deliver affordable rents for low and medium income earners.
Stimulate organisational as well as private investors to take part in affordable rental property investment.
Boosting the number of dwellings constructed and going onto the market.

Are you tied for 10 years?

Properties that apply and are given the NRAS Incentive may stay in the arrangement for ten years. There are options for replacing properties with comparable properties in the identical area or to sell on the properties while keeping them in the NRAS scheme. There is however a fine for withdrawing properties from this scheme without notice; this fine is, for the year in which the dwelling is brought out of the NRAS scheme, the complete forfeiture of any unpaid incentive.