National Rental Affordability Scheme

NRASNational Rental Affordability Scheme

Is a scheme developed by the Australian Government to encourage investors to build affordable rental housing.

Public concerns over rental affordability has encouraged the Federal Government to develop a housing scheme which offers tax-free financial incentives to the business sector and not for profit housing providers to build and rent affordable dwellings. Through the provision of the tax incentive, NRAS aims to:

  • Increase the supply of new affordable rental housing;
  • Reduce rental costs for low and moderate income households; and
  • Encourage large scale investment and innovative management of affordable housing.

Under the scheme, qualifying owners will receive either a grant or refundable tax offset to the value of $10,350 today, paid annually for up to 10 years. In return the investor must rent eligible dwellings to low and moderate income households at a rate that is at least 20 per cent below prevailing market rates.

The Australian Government is committed to stimulating the construction of 60,000 high quality homes and apartments. Up to 35,000 new dwellings will be supported in the years up to 2014-15, with a further 25,000 dwellings to be supported beyond 2014-15.

Importantly, NRAS is not a public housing program; it is a tax incentive to induce more private investment in the lower price range of the residential construction market.

NRAS tenants are typically key workers such as childcare workers, nurses, police officers, fire-fighters and paramedics. In addition to their salary or wages, many NRAS tenants may be eligible for Commonwealth Rent Assistance, a fortnightly payment to assist with rental costs.

Approximately 1.5 million households are currently eligible to rent NRAS properties, ensuring a strong ongoing demand for NRAS properties and a large pool for investors to choose from.

In many instances, NRAS can turn negatively geared property into positively geared and positive cash flow investments.

Contact United Global Capital today to speak with one of our UGC Global Property advisers and learn how you can take advantage of this rare investment opportunity.

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