The NRAS year runs from 1st May to 30th April. The Federal Government contributes 75% of the National Rental Incentive (NRI) for NRAS each year, with the remaining 25% being contributed by the State and Territory Governments. The NRI is indexed annually to the CPI and is $10,917 for the 2015-16 NRAS year and $11,048 for the 2016-17 NRAS year.
Federal Government Incentive Payment
The Federal Government’s portion is claimed as a Refundable Tax Offset (RTO) on your income tax return and is paid directly to you by the Australian Taxation Office (ATO). Ethan Affordable Housing will issue you with an annual statement and letter of advice showing the amount claimable.
State/Territory Government Incentive Payment
The State/Territory portion is paid to Ethan Affordable Housing by the relevant State/Territory for distribution by Ethan Affordable Housing to the property owners. The State/Territory makes the distribution to Ethan Affordable Housing each year and the payment to the investor occurs shortly after receipt of the payment.
Incentive will be paid on a pro-rata basis where:
• The property has not been active for the entire year (ie it only became available for rent partway through the year)
• The property did not meet compliance requirements for some of the year (it was rented at an ineligible rent or to an ineligible tenant)
• The property was vacant for in excess of 91 days cumulatively throughout the year or consecutively over two consecutive NRAS years (incentive is reduced on a pro-rata basis for any vacancies over 91 days). Cumulative vacancies in excess of 181 days in one NRAS year or consecutively across two consecutive NRAS years will result in a $0 incentive.
• The property was unavailable for rent for a period during the year (for example if repairs or maintenance was required before a property could be re-let)
• The property was transferred to or from another owner during the year (you will be paid for the portion of the year that the property was owned by you)
Process and Timings
The process and approximate timings for incentive payments is:
- NRAS year ends 30th April
- Ethan Affordable Housing lodge an incentive claim on your behalf before 30th June
- The Federal Government audits the documentation and processes claims
- Upon completion of the claims assessment for all properties, the Federal Government issues RTO (Refundable Tax Offset) certificates to Ethan Affordable Housing for all eligible properties. This process will normally take several months however receipt of the Federal component is anticipated to occur in October. Occasionally there is a request for further documentation which can delay this process for individual properties.
- Shortly after receipt of the RTO certificates, Ethan Affordable Housing generates and mails the annual statement to the investor
- The investor will complete a tax return in order to claim RTO from the ATO
- Following assessment and the issuing of RTO certificates, the Federal Government will provide the relevant State/Territory with the assessed information that will enable them to process and issue the State/Territory component of the NRI. The State/Territory component of the NRI is paid to Ethan Affordable Housing
- Ethan Affordable Housing generates a cheque for the State/Territory component for each eligible property and will issue this directly to the investor
For further information regarding Incentive Payments:
• The Federal Government NRAS website: https://www.dss.gov.au/sites/default/files/documents/07_2014/individual_investors.pdf
• Contact Ethan Affordable Housing Group: firstname.lastname@example.org or 0398302669
• Your Financial Advisor or Tax Accountant