- Posted By Jasmine Adams
What is the National Rental Affordability Scheme? The National Rental Affordability Scheme (NRAS) is designed to help low-income earners rent good-quality properties for at least 20% below market rates.
If you buy a new property through an approved participant and rent it to someone who is eligible under NRAS regulations, the government pays an annual subsidy. This minimises your investment risk. The scheme also offers potential tax benefits.
NRAS homes must be rented to eligible tenants at a rate that is at 80 per cent or less of the market value rent and comply with all conditions of allocation in order to be eligible for the NRAS incentive annually. The NRAS incentive is paid per dwelling, and is indexed each year in line with the Rents component of the Consumer Price Index. The Scheme offers annual incentives for ten years.
The two key elements of the incentive are:
- an Australian Government incentive per dwelling per year as a tax offset or direct payment
- State or Territory governments may offer approved participants a contribution per dwelling per year in direct or in-kind financial support.
Generally, the NRAS incentive is provided to the approved participant in the form of a refundable tax offset (RTO). However, a cash payment can be made if the approved participant receiving the NRAS incentive is an endorsed charitable institution. The current incentive payments are available on the NRAS incentive (indexation) page.
Am I eligible to rent an NRAS property?
NRAS is targeted at low to moderate income households. To be eligible you must:
- Provide proof of your household’s gross income over the last 12 months
- Continue to provide proof of income to your tenancy manager on an annual basis
- Not exceed the relevant household income limits for your household composition
- To find out more information on household composition income eligibility limits, visit the Australian Government Department of Social Services website.