What is the NRAS scheme?

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NRAS is short for National Rental Affordability Scheme. The NRAS scheme is a Federal and State Government backed incentive scheme launched in 2008 which is designed to:

• encourage investors to develop additional new houses for the rental market.
• provide an affordable rent program for average Australian wage earners as individuals, couples and families. It is not social housing.
• yield higher than usual returns for investors in the residential property market.
• increase the number of rental dwellings built through the stimulation of demand and investment, while supporting the building industry and related jobs and the Australian economy.

The government aims to achieve this by providing a tax incentive for investors in NRAS properties in return for the properties being rented at a discounted rate.  The NRAS scheme is not housing commission or social housing.  NRAS properties are rented to private individuals with incomes of up to $100,000 pa.

There are strict guidelines for properties to qualify under the NRAS scheme. NRAS properties must be close to transport, schools, shops etc making NRAS properties desirable for tenants and property investors.  There are also specified guidelines for the management of NRAS properties.  The manager is reponsible for ensuring that tenants meet the income criteria and that they are reviewed against the criteria every two years.

The NRAS scheme is funded for up to 50,000 dwellings but NRAS Approval for new developments will end at 30 June 2012 unless all allocations are taken beforehand.  Owners of NRAS Properties will continue to get the tax incentives for ten years from acquisition.