National Rental Affordability Scheme:

What is it?
The National Rental Affordability Scheme (NRAS) is an Australian Government initiative to stimulate the supply of new affordable housing by up to 50,000 by June 2016.

A NRAS property offers a substantial annual tax-free incentive for any dwelling built under the program.  There are strict application criteria that must be met to build a property through the NRAS and a property can be under the scheme for 10 years.

All of the NRAS properties must be rented at least 20 per cent below prevailing market rates, to low and moderate income households that comply with a number of requirements.

It is a long term commitment by the Australian Government in partnership with the states and territories, to invest in affordable rental housing. It 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

 

What does this mean to you?
The NRAS opens up the investment property market to people that previously couldn’t afford to get into the market.

The annual income-tax free incentive is currently $9,524 per dwelling, and is indexed each year to the rental component of the CPI.  The Incentive comprises:
• an Australian Government contribution of $7,143 per dwelling per year (as a refundable tax offset or payment); and
• a State or Territory Government contribution of $2,381 per dwelling per year (in direct or in-kind financial support).

It is imperative that you have a professional asses your individual situation because one size does not fit all.  There are a number of legal requirements and criteria that must be met to build a property through NRAS and to maintain NRAS status and benefits. You need to consider that, “just because you can, does not mean that you should.”

Your decision to invest in a property through NRAS needs to fit a large number of criteria so as it is designed to suit you – not the builder or the bank or a real estate agent. 

 

You should ask yourself:
• Is the property in the right area?
• Will it achieve the right growth?
• Will it attract the right type of tenant?
• What is the right loan for me?  Not just now, but in the future?
• How much deposit do I need?  What if I don’t have a deposit?
• Why would I buy an investment property?

These questions are just the tip of the iceberg…

 

How can we help you?
At Financial Advisers Australia (FAA) our job is to represent you and look at what the property needs to do for you.  This may be growth, cash flow management or tax effectively. 

We are a boutique financial company, which means that we have no affiliation to specific banks or other lending institutes and we can offer you advice best suited to you.
 
If you have any questions about the NRAS come in and talk to one of our consultants for a free no obligation appointment by clicking here.

Prepared by John Hehir Financial Advisers Australia (FAA)