The National Rental Affordability Scheme (NRAS) will help increase the supply of affordable rental dwellings by up to 50 000 by June 2012. Rent for these properties will be charged at 20 per cent below the market rate for eligible tenants.

vernments, the business sector and community organisations recognise that housing affordability is an issue of significant community concern. The growing cost of housing is having a serious impact on the ability of many Australians to meet their financial commitments.

The Australian vernment is providing Incentives to:

• increase the supply of affordable rental dwellings;
• reduce rental costs for low to moderate income households;
• encourage large scale investment and innovative delivery of affordable housing; and
• Stimulate the construction industry at a time of economic downturn.

The National Rental Affordability Scheme offers annual Incentives for ten years. The two key elements are:

• A Commonwealth vernment Incentive of $6 000 per dwelling per year as a refundable tax offset or payment; and
• A State or Territory vernment Incentive of $2 000 per dwelling per year in direct or in kind financial support.

The tenant eligibility criteria will ensure the National Rental Affordability Scheme is open to families on low and moderate incomes, individuals who are looking to rent a property for the first time, and singles in private or public rental accommodation, including people working or undertaking study or training. See below table for thresholds

Please note that the ‘initial income limit’ column, highlights the Gross Annual Income that the household must not have exceeded in the 12 month prior to signing the tenancy agreement. The ‘upper income limit’ column, highlights the $ figure (25% above the initial income limit) that tenants must not exceed to remain NRAS eligible. As discussed earlier NRAS tenants are given a grace period should they exceed this figure.

Case study

RE/MAX Peninsula are exclusive agents for a 28 townhouse development located in Burpengary Qld. Prices range from a mere $305,000 to $325,000 below is an example of NRAS on this project.

Normal market rent                                                        $310 per week                  per annum          $16,120

Discounted NRAS rent 20%                                          $248 per week                  per annum          $12,896

Total NRAS payments from vernment                                                                             

Divided by 52 weeks in the year                                                $167 per week                  per annum          $8,672

Total amount now received weekly                        $415 per week                  per annum          $21,580

This is a fantastic opportunity for investors to have cash flow positive properties from year 1.

If you have any questions about NRAS please contact Ryan Scott on 07 3480 4000