The NRAS scheme has been around for a couple of years in Australia, and can be extremely useful in the way of tax breaks for Australians (this is scheme is legal and we actually encourage our clients to look into it), who are looking for a good investment property.
What is NRAS? (National rental affordability scheme)
NRAS stands for the National Rental Affordability Scheme. It is an initiative set up by the Australian Federal Government, providing tax free cash incentives which are indexed annually for 10 years to certain residential property investors. You can see a list of NRAS properties for sale on this website.
How much are the cash incentives?
The cash incentives for NRAS are currently set at $10,350. The annual incentives provided by NRAS help people or entities to build and rent new homes for and to lower income households at rates that are always at least 20 per cent below the market value rent. It is similar to a scheme implemented in the USA in the 1980s which provided over 1.5 million homes.
How do you apply for the NRAS cash incentives?
In order to receive a cash incentive, you’ll need to be an approved participant who has applied through the formal process. Calls for applications are made on a regular basis and applications can note be submitted at random.
Who is the NRAS good for?
The overall aim of the scheme is to increase the amount of affordable rental properties available for lower income households. Approved individuals or families can benefit hugely by renting NRAS homes at far lower rates than standard market value rents.
How do potential tenants rent an NRAS home?
There are set income limits for tenants, which are based on the gross income of each household – these vary with single dwellers, couples and families. If a tenant’s income significantly increases whilst renting an NRAS home they will cease to be eligible for the scheme.
Who manages the scheme?
There are several organisations involved in managing the NRAS. The ongoing management is overseen by the Department of Social Services, however they work closely with the Australian Tax Office and individual states and territories.
There are a number of property developers out there who look after the scheme such as Property Road SA and number of other investment companies.