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What is NRAS?
The National Rental Affordability Scheme (NRAS) has been implemented to help stimulate
the supply of up to 50,000 new affordable rental properties across Australia by
2012 at a cost to the Government of $623 million in the first four years and is
a key component of the Rudd Governments $3.7 billion housing package.
The primary focus of NRAS is to provide assistance and funding for:
- the increase in supply of affordable rental dwellings;
- reduce rental costs for low to moderate income households; and
- encourage large scale investment and delivery of affordable housing.
The Federal Government has combined with State and Territory Governments to offer
Government Incentives to large scale investors and housing providers to:
- develop and build properties as Approved NRAS Dwellings; and
- to make the properties available for rent to Eligible Tenants at least 20% below
the Market Value Rent for a period of 10 years.
The National Rental Affordability Scheme Act 2008 and the National Rental Affordability
Scheme Regulations 2008 (the Act) passed the Senate in November 2008.
Under NRAS, the Federal, State and Territory Governments will contribute up to $8,000
per annum for each Approved NRAS Property. This is comprised of a contribution of
$6,000 from the Federal Government and a contribution of $2,000 from State and Territory
Governments.
The contribution from the Federal Government will be in the form of a ‘refundable
tax offset’ and the contribution from the State and Territory Governments will be
a ‘non assessable non exempt’ payment or other in kind support as determined by
the respective State or Territory Government. Incentive payments from Commonwealth,
State and Territory Governments are payable for up to 10 years and indexed to the
rental component of the Consumer Price Index.
The Approved NRAS Properties are to be managed by tenancy manager in accordance
with the relevant State and Territory requirements. The Approved Participant, in
this case being the Investor and recipient of the Government Incentive payments
is required to submit annual statements of compliance including the compliance with
the tenancy selection and management criteria of the scheme. This will all be done
for you by the Manager.
The Federal, State and Territory Governments have the ability to apportion, withhold,
offset or withdraw the Government Incentive Payments in the event that the Investor
does not satisfy the obligations of the scheme.
Approval by Minister for Housing – Federal Government
The Manager will obtain approval from the Minister for Housing and the Department
of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) to pay
Government Incentives for NRAS approved properties.
The Manager intends to apply for further allocations from the Minister under future
rounds of allocations. The Manager believes that it can meet the criteria set out
in the Act under the future rounds of allocations.
The future round of allocations by the Minister is implemented as the Expansion
Phase which commences in July 2010 and expires in June 2012. The Minister intends
to allocate 39,000 incentive payments during this period.
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