What is NRAS?
In response to the growing housing shortage, the National Rental Affordability Scheme (NRAS) was introduced in 2008 by the Australian Federal Government in partnership with the States and Territories to:
Increase the supply of affordable rental dwellings – target of 50,000 affordable rental dwellings Australia-wide by 2016;
Reduce rental costs for moderate income earners;
Encourage large scale private sector investment in affordable housing projects by provision of 10 years of tax-free incentives.
For further information, refer to the NRAS Department of Social Services website:
How does it work for investors?
The NRAS Tax Free Incentive for the NRAS year ended 30 April 2015 is $10,661.17.
The NRAS incentive is received annually in arrears in two components and “passed through” the approved NRAS provider:
1. Refundable tax offset (Federal component – $7,995.88 for the 2014/15 NRAS year)
2. Direct cash payment (State component – $2,665.29 for the 2014/15 NRAS year)*this incentive is indexed annually on 1 May by the rental component of the weighted Australian capital city’s CPI;
The incentive is set per dwelling regardless of size or location.
In return for purchasing an NRAS approved property and renting it to an eligible tenant at 80% of the market rent, the Government will pay an investor an annual NRAS incentive for 10 years;
The full NRAS incentive is paid by the Government during periods of vacancy for up to 13 weeks per annum.