What is it and how can it benefit me?
The National Rental Affordability Scheme (NRAS) provides an Incentive to approved business and community organisations who build and rent dwellings to eligible low and moderate income households at a rate that is at least 20% below the prevailing market rate.
The Incentive is designed to make investment in affordable housing competitive with other asset classes.
The Incentive is income tax-free, indexed annually and complemented by existing taxation arrangements including depreciation. It is paid annually to approved participants for each approved rental dwelling which meets NRAS compliance requirements. The Incentive currently comprises:
- An Australian Government contribution for $7,486 per dwelling per year for up to 10 years as a refundable tax offset or payment (not-for-profit organisations endorsed as charities by the Australian Taxation Office can receive the contribution as a direct payment); and
- A State or Territory Government contribution of $2,495 per dwelling per year for 10 years as a direct payment or in-kind financial support, such as reduced stamp duty, land taxes or infrastructure charges.
Where the approved rental dwelling is first made available for rent part way through an NRAS year (from 1st May to 30th April), a partial entitlement will be paid in both the first and the final NRAS year.
The Incentive is provided on a pro-rata basis for the number of days in the NRAS year that the approved rental dwelling was available for rent and met compliance requirements. The Incentive amount is calculated from the day the dwelling is first available to rent and recipients will receive it at the end of each financial year once continuing compliance with NRAS obligations have been certified.
NRAS dwellings may be vacant for a period of up to 13 weeks cumulatively or continuously in an NRAS year, or continuously across two consecutive NRAS years, and still be entitled to the full amount of the Incentive. If the dwelling is vacant for a greater period the Incentive will be provided on a pro-rata basis for the number of days in the NRAS year that the approved rental dwelling was available for rent and was compliant.
Australian Government – the Department of Families, Housing, Community Services and Indigenous Affairs, June 2011.