The National Rental Affordability Scheme
The National Rental Affordability Scheme (NRAS) is a partnership between the Australian Government and the States and Territories to invest in affordable rental housing.
NRAS commenced in 2008, and seeks to address the shortage of affordable rental housing by offering financial incentives to persons or entities such as the business sector and community organisations to build and rent dwellings to low and moderate income households at a rate that is at least 20% below the market value rent.
NRAS aims to:
• Increase the supply of new affordable rental housing
• Reduce rental costs for low and moderate income households
• Encourage large-scale investment and innovative delivery of affordable housing.
Who benefits from the scheme?
NRAS aims to provide affordable rental housing for low to moderate households, including Australia’s key infrastructure workforce, such as teachers, nurses, police officers and paramedics. Eligible individuals and families will be able to rent NRAS dwellings at 20% below market rates, making their housing more affordable.
NRAS is intended as a commercial, profitable investment for participants while also increasing the supply of affordable housing in Australia. Investors in the Scheme may benefit from enhanced cash returns, certainty of the annual incentive and reduced vacancy rates over the 10-year life of the NRAS.
Who is eligible to participate in NRAS?
Eligible participants may include financial institutions, investors, private developers, not-for-profit organisations and local governments who may build, own, finance or manage the NRAS dwellings.
Who can rent an NRAS dwelling?
Income levels for eligible NRAS tenants are generous and accommodate a range of low to moderate income earners. The NRAS also allows for tenant salary increases of 25% above the income limits.
For a comprehensive list of eligible income levels, visit the Department of Social Services website.
Who manages the Scheme?
The Department of Social Services is responsible for the implementation and ongoing management of the NRAS, in consultation with the Australian Taxation Office.
The Australian Government is working closely with State and Territory Governments, investors, financial institutions, property developers and not-for-profit housing providers in the ongoing management and implementation of NRAS.
The benefits of investing in an NRAS approved property include:
• Increase in income,
• Ownership of a newly built property,
• Potential investment earnings from the growth in the property value,
• Potential negative gearing benefits and positive cash flow at the same time,
• Tax-free income indexed for 10 years depending on your business structure,
• Tax offsets indexed for 10 years,
• Tax deductions on interest payments,
• Tax deductions on property depreciation,
• Social responsible investment in affordable rental housing,
• A choice of properties throughout Australia from one source,
• Ability to opt out at any time.
Visit the Department of Social Services website for more information about the National Rental Affordability Scheme.