What is the NRAS scheme?
The National Rental Affordability Scheme (NRAS) is a long term commitment by the Australian Government to investors prepared to build affordable rental housing.
NRAS seeks to address the shortage of affordable rental housing by offering 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 will:
- 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.
The incentive, payable either as a grant or refundable tax offset, is paid annually for up to 10 years. 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 50,000 high quality homes and apartments. Up to 35,000 new dwellings will be supported in the years up to 2014-15, with a further 15,000 dwellings to be supported beyond 2014-15.
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 that assists with rent 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.