What is the National Rental Affordability Scheme?

By the resi financial blog team, 28 August 2013

What is the NRAS

If you are currently looking at investing in Australian real estate, you may have already heard about the government's ongoing National Rental Affordability Scheme (NRAS).

The NRAS is an initiative which was implemented in 2008 and is designed to give property investors an incentive to offer affordable rental housing to Australian families.

Why should I invest in NRAS property?

When you buy NRAS property, you currently receive an incentive payment of $10,350 per dwelling per annum for up to ten years, with that money coming from both the federal and state governments. This is adjusted each year based on the Consumer Price Index.

All NRAS property incentives are tax free, meaning that any associated tax will be written off your tax bill. Any remainder (if applicable) will be paid out as a refund.

Are there any other benefits?

NRAS property is also a highly attractive option for investors as these properties show very low vacancy rates.

For homeowners who are already achieving the best fixed interest rates on the market, these properties offer a great way to rapidly reduce your mortgage through the associated income.

Who can live in NRAS property?

NRAS property is reserved solely for individuals and families with incomes of less than $109,264 per annum (although that limit can be raised under certain circumstances).

For this reason, owners of NRAS real estate are required to rent their properties to tenants at a discounted rate, and also must meet certain property management requirements.

Who can buy NRAS property?

Anyone with the appropriate financial resources can invest in NRAS property, although NRAS Australia recommends that you talk with an experienced advisor before making any final decisions

What qualifies as an NRAS property?

Under the scheme, NRAS properties are required to be close to transportation options, as well as schools and shops. Essentially, NRAS properties need to be desirable places to live for tenants as well as worthwhile investments for property investors.

To find out more, it's important to talk to an expert who can offer you invaluable advice and clear up any questions you may have about buying an NRAS property.

Categories: Property Investment