National Rental Affordability Scheme (NRAS)


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1. How does the National Rental Affordability Scheme (NRAS) increase my investment returns?     

Capital Growth

Many NRAS properties that we sell and manage are located in subdivisions where there is little or no differentiation between the types of ownership.  Properties are either brand new or recently built and have been constructed to meet all State and Commonwealth building standards.  Being new or near new also means they are covered by statutory building warranties.  Given the properties are part of new housing estates or new strata titled developments, there is no reason for differences in capital gains for properties purchased under the NRAS scheme.  In fact, many of these new subdivisions are attractive and have the potential to deliver better capital growth than neighbouring developments.

NRAS Incentive & Tax Benefits

The NRAS Incentive of $10,917 is paid annually on the condition that throughout the ten year period the dwelling is rented at 20 per cent below the market rent to eligible low and moderate income households.  Given the incentive is indexed annually by CPI, the total return for the investor over 10 years is greater than $110,000.

As the NRAS properties are new or recently built, they benefit from the maximum depreciation schedule and capital allowance.  Our tax advisers have helped prepare detailed investment cash flow models for every NRAS property we sell.  Please contact our office on 1300 788 438 or for a detailed investment cash flow analysis for your preferred NRAS investment property.

NRAS & Negative Gearing

The benefit of buying a new NRAS property is that you are able to claim the maximum tax loss plus you also receive the NRAS Incentive.  In many cases this turns the investment property from being cash flow negative (i.e. where you need to fund the loss each week) to cash flow positive, where you receive an after tax income from the property with no additional tax payable. Negative gearing has been available to property investors in Australia for more than 20 years.  In the early 1990’s the government made the mistake of abolishing the right to claim interest losses from rental property against other income.  This led to massive turmoil in the rental market and property investors exited the market in droves.  The government recognised the mistake and quickly reintroduced negative gearing within two years.

2. How secure is the NRAS funding?     

The National Rental Affordability Scheme was created by the Council of Australian Governments (COAG) as part of a strategy to address housing affordability within Australia.  The legislation to support and guarantee NRAS payments from the government was passed in late 2008 and investment properties available under NRAS have been in the market for approximately five (5) years.

There are a number of factors that provide a high level of security for NRAS funding. These are:

  1. The NRAS funding is secured by Commonwealth legislation and the program has bi-partisan support in the federal parliament;
  2. Over the past 20 years, the Commonwealth Government has (through the Commonwealth-State Housing Agreements) increased rent assistance levels to support increased supply of private rental housing for the Australian population.  During this same period of time the Commonwealth Government has reduced funding for government funded housing (public housing and housing commission homes).  This policy trend is to encourage the private investor market to deliver rental properties and the NRAS program is part of this trend.
  3. Australia’s well documented housing shortage is becoming worse.  According to BIS Shrapnel research in 2012, growth in dwelling demand is 180,000 nationally per annum, whilst commencements are only 165,000.  The shortfall is growing in several capital cities, especially Sydney and Brisbane where building approvals are consistently below dwelling demand.

It could well be political suicide for a Commonwealth Government to scrap an affordable housing program like NRAS unless it came up with something more palatable to address Australia’s housing affordability and housing supply problems.  With NRAS, governments at a State and Federal level are getting private investors to purchase and rent out good quality investment properties to mainstream Australia – this is a win/win/win outcome for the government, property investors and tenants.

3. Will I get good quality tenants if I invest in an NRAS property?     

Given NRAS housing is targeted at people earning from $30,000 - $142,000 per annum, it is accessible to a wide range of tenants.  Our experience at Affinity Property Australia is we have a wide range of tenants renting NRAS properties including single parents, couples, retirees, families and pensioners.  These tenants have a wide range of occupations including teachers, healthcare workers, retail, office management, construction workers and other varied occupations.

We provide a comprehensive range of investor services, property management, tenanting and asset management services for our property investor clients and are fully accredited NRAS Property Managers with the Queensland Government.  We use the same strict selection criteria and tenant assessment checks with NRAS tenants as we do with standard investment properties.  These checks and processes are supported by quality property systems and highly experienced staff who deliver exceptional customer service to our many property investors and tenants.

4. What happens if I want to sell my NRAS investment property?     

You can sell your NRAS investment property whenever you choose.
Depending on where the property is located and the NRAS agreement that applies to the property, a number of matters need to be considered:

  • we may already have investors that want to buy an existing NRAS property with its current tenancy arrangements in place.  Dwellings can be sold to another investor with the balance of the NRAS scheme.
  • we can help market the property to new NRAS investors, if desired.
  • dwellings can be removed from the scheme should you wish to live in it yourself or sell the dwelling to an owner occupier.
  • an NRAS property sold outside the scheme, will cause the NRAS incentive to be lost for that year.

5. How does a typical NRAS investment property compare with a standard investment property?     

In order to qualify for inclusion in the NRAS program, each NRAS property must be brand new and purchased direct from the developer.  NRAS properties are located all over Australia in areas that the Government has designated as being subject to high rental demand and therefore, one could conclude subject to high rental growth.

6. Why hasn't my accountant or financial planner told me about NRAS?     

Here’s a simple rule - if you want to be a successful property investor, you should seek the advice of experienced and successful property investors.

Some accountants have excellent property investment skills but don’t expect them to be creative in guiding your wealth creation program.  Accountants are specialists in their area of expertise – accounting.  They should be able to provide you with expert advice in completing your tax return after you have provided them with all the figures.  However, many accountants are not specialists in property investment and you should never rely solely on them for property investment advice.

Over 90% of the financial planning advice given to consumers is delivered by institutionally owned financial planning organisations.  A large number of financial planners are not interested in assisting you to invest directly in property, as they receive no fees out of this investment.  They are really geared toward guiding you into indirect investments such as managed funds packaged by the large financial institutions that own and control their business.

At Affinity Property Australia, we prepare a comprehensive investment analysis for every property we sell.  You are welcome to take this investment analysis to your accountant or financial planner to discuss the NRAS property investment with them.

7. How do I start investing in an NRAS investment property?     

The process for investing in an NRAS investment property is really simple.  Call us now on 1300 788 438 or contact us via e-mail on   We will step you though the whole property investment process and ensure you receive information about a range of properties to suit your budget.

8. When does the NRAS Tax Free incentive contribution actually get paid? 

Once the Federal Government is satisfied that NRAS conditions have been met, NRAS investors are provided with their annual tax offset certificate for their NRAS property investments. The NRAS year is from 1 May until 30 April each year. Payments are usually made by the Australian Government after July each year and by State Governments after September, following the end of each NRAS year.

9. Can I buy more than one property? 

Yes, we can help you with a strategy if you would like to do so.

10. When do the NRAS incentives begin?

From the moment you take ownership of the property or from the commencement date advised by the government.

11. What happens at the end of the 10 years? 

You can sell or keep the property and the rent per week changes to the market rent.

12. Can my son or daughter rent my NRAS property?         

Yes. The tenant must be eligible and the property must not be rented to the owner.