What is NRAS?
NRAS is short for the National Rental Affordability Scheme and was legislated by the Government in 2008.
The purpose of NRAS is to supply quality rental homes at reduced rents for the large number of Australian families unable to buy their own homes or to afford the full cost of market rents.
Affordable housing helps semi professionals such as policemen and woman, social care workers and teachers.
There is a massive short fall of affordable housing in Australia and the National Housing Supply Council estimates by 2013 there will be a shortfall in dwellings of more than 200,000.
There are three parties involved (1) You, The Investor (2) The Consortium and (3) The Tenant
What’s in it for you – the investor?
When you purchase an NRAS approved dwelling anywhere in Australia it is exactly the same as buying any other investment property. You own it, you have title and you may choose to opt out of the NRAS scheme at anytime - this is what the government intended.
Each year for 10 years, you will receive a minimum tax credit of $9,524 as soon as your eligible tenant moves in.
By the way, you get to choose your tenant from a short list!
Your “eligible” tenant has the rent discounted by 20%.
That’s it... it carries on like a normal investment property with all normal cost and risks associated with purchasing an investment property.
Who or what is a consortium?
This is simply a company that manages your tax incentive with the Government on your behalf. They make sure your tenant remains eligible (i.e. to be eligible their gross income must be within a certain salary band) and so that you will receive your tax credit each year from the government - it’s their job!
The consortium will then charge you an annual audit fee ranging between $500 - $700 p.a depending on the consortium.
Who is the tenant and how do they become an ‘Eligible’?
These are individuals or families mentioned above who are considered to be on moderate incomes.
There are income limits for tenants and they must prove their salaries before applying, to be an ‘eligible’ tenant.
Once this is confirmed, then they can request to be your tenant and if agreed by you, become your tenant and receive a rental discount of 20% on your property.
Are there enough of these tenants?
Let me give you an example ...there are 1.5 million households who currently fall in this category.
For further information in relation to specific criteria and eligibility, please speak to our sales team or visit the NRAS website