The National Rental Affordability Scheme (NRAS)

What is NRAS?

A minimum $8, 672, from the Government paid directly to you, every year for 10 years. That’s is $86,000 in benefits Tax Free

NRAS was established by t2he Australian Government in July 2008 in response to the current Australian housing shortage in order to address this issue. Remember the late last year when the Federal Government convened the National Housing Supply Council? NRAS is the result this Council estimated that by the end of 2013 Australia will have 203,000 less dwelling than need.

The Government has invested over $623 million at you the private investor of Australia to help fill the gap in the shortage of housing to affordability house to rent.

The NRAS scheme provides incentives to be allocated on a competitive selection process to investors and Developers by way of tax credits and offsets paid annually for ten years plus.

NRAS Scheme will take 10 year rental lease giving the investor security of a long term lease. 

In 2009 the amount offered as a refund or tax offset to eligible investors was $6,504 for each dwelling. Organizations that are listed as charities with the Australian taxation Office will also be eligible for an additional sum or in-kind payment of $2,168 or more to be contributed by the State or Territory Governments

To qualify under the NRAS scheme, the newly built homes must be rented at least 25% below the current market rental rates.  The rate of market rental will be determined by comparisons with other similar rentals in the area and will need to be justified. Rental rates will be indexed annually in accordance with the rental component of the CPI. New homes built under the NRAS scheme will be managed by appointed tenancy managers as per all relevant State and Territory regulations. In selecting and managing tenancies, the appointed NRAS tenancy managers will be subject to specific reporting requirements and will have to comply with all NRAS Scheme requirements.  It is hoped that reducing the market rental by at least 20% will greatly improve the affordability of rental accommodation in Australia while also providing more security to tenants by offering longer leases than are usually currently available in the private rental market.

Cash Flow Positive

This investment is suitable for most everyone because the cash flows are strong that this investment runs at a substantial profit each year. Our analysis shows that you are far better off dropping the rent by 25% and picking up the Government incentives. It makes most investors enjoy positive cash flow on this the NRAS system.

NRAS mean to you?

If you offer your newly built investment property at a reduced rental rate of at 25%less than market rental value you will qualify for incentives under the NRAS scheme such as:

• You get government tax credits worth even more than the reduced rental component for ten years.
• $8,672 indexed annually at the rental component of the CPI extra tax-free every year in your pocket.
• A total of $86,672 worth of incentives to you over ten years.
• Eligibility for all other tax deductions normally associated with property investment.
• Security to both the investor and the manager via a ten-year head-Lease to investor owners giving control to the consortium.
• Insurance policies providing cover for public liability, repairs due to tenant abandonment, building replacement and owner contents.
• Security against vacancies via access to an extensive tenant database for use by professional managers.
• An accredited Housing Manager for all NRAS funded properties.
• A secure income stream providing a high level of income certainty for investors.
• Quality tenants – NRAS homes are not Housing Commission and are only available to

Screened working tenants on middle incomes who are unable to buy their own properties but who earn too much to qualify for public housing.
A couple with three children earning up to $123,369 are still be eligible to rent an NRAS property at the 25% discount.

• Quality homes – NRAS eligible properties are large comfortable homes with four bedrooms, two bathrooms and double garages.
• Low risk long term leases 10 Years – Offering rents assures a waiting list of potential tenants and a strong income flow in comparison to other property investments.

To see if you are eligible to take advantage of this great investment opportunity, speak to your local Refund Real Estate Group advisor today.