NRAS Tax Free Incentive Payments

What is NRAS?

The National Rental Affordability Scheme (‘NRAS’ or ‘the Scheme’) provides investors with NRAS Tax Free Incentive Payments for investing in affordable housing. NRAS is an Australian Government affordable housing initiative. The Scheme commenced on 1 July 2008, in partnership with state and territory governments.

Summary of NRAS:

Is valid for 10 years
Dwellings must be rentals to eligible NRAS tenants at 80 percent or less of the market value rent;
NRAS increased the national supply of affordable rental housing;
rental costs reduced for low to moderate-income households
NRAS encourages investment in affordable rental homes

Importantly, you should know that NRAS homes are not social housing. Contrary to popular belief, many NRAS rental properties are owned by regular mum and dad investors, not the government themselves.

Also, the owner pays all rental property costs, as is the case with a normal rental property. The NRAS Scheme will conclude in 2026. For detailed government reports about the Scheme CLICK HERE

The NRAS Year runs from 1st of May to 30th April each year. As such, this means it offsets the financial year by two months.

The Federal Government contributes 75% of the National Rental Incentive (NRI) for NRAS each year. Meanwhile, the State and Territory Governments contribute the other 25% of NRI. The federal payment comes in the form of tax offsets, while the state governments pays its share of the funds directly into your bank account.

Consult your local NRAS property experts for a great investment opportunity

If you want to get involved in the National Rental Affordability Scheme and receive tax free incentive payments, enquire now with the Affinity Property team.

2020-21 NRAS Tax Free Incentive Payment

The NRI is indexed annually to the CPI. It is $11,270.59 for the 2020 – 2021 NRAS Year.

For more information, view the Australian Government NRAS Incentive 2021 indexation fact sheet on their website. In addition, you can find all prior incentive payments there as well. To view them CLICK HERE

NRAS Incentive Payment for 2021-22

Incentive values have reduced for the 2021-22 NRAS year from the prior year and are listed below.

Contributed by	Amount
Australian Government Contribution	$8,343.05
State/Territory Contribution	$2,781.02
Total	$11,124.07

Federal Government Incentive Payment

You can claim the Federal Government portion through your income tax return by submitting a Refundable Tax Offset (RTO). After this, the Australian Taxation Office (ATO) pays the incentive directly to your bank account.

Also, please note that your NRAS Approved Participant is responsible for supplying you with your NRAS RTO Certificate.

As of 2021, the Federal Government issue RTO (Refundable Tax Offset) certificates to your NRAS Participant by late July. Afterward, you will receive the certificate as the NRAS Investor. Please contact your NRAS Approved Participant, or contact Affinity Property for information if you are unsure about the timing of payments.

Your RTO needs to be claimed in your Tax Return. Additionally, the process for lodging your return will depend on the entity in which your property was purchased:

These tax offsets reduce the amount of tax that you have to pay.

State Government Incentive Payment

In Queensland, the State Government pays the state component of NRI to the NRAS participant. Firstly, the Federal Government issues the RTO certificate to you. After this, the State Government sends its share of the funds to your bank account.

Pro rata Payments

Notably, there are times when you may not receive the full NRAS payment. As such, these are pro-rata payments. Pro-rata is a Latin term meaning “partially”.

NRAS Tax-Free Incentive payments may be paid on a pro-rata basis where:

your property was not active for the entire year (i.e. it only became available to rent partway through the year)
compliance requirements for your property were not met for some of the year (it was rented at an ineligible rent or to an ineligible tenant)
the property was vacant for more than 91 days cumulatively throughout the year or consecutively over two consecutive NRAS years (NRAS incentive is reduced on a pro-rata basis for any vacancies over 91 days)
there was a transfer of property to or from another owner during the year (you will be paid for the portion of the year that the property was owned by you)

Process and Timing for your 2021 NRAS Incentive Payment

NRAS Year ended on 30th April 2021.
Your approved NRAS Participant* should have lodged the bulk incentive claim before 30 June 2021.
The Federal Government should issue RTO (Refundable Tax Offset) certificates to your NRAS Participant (hopefully before 30 September 2021). The certificates will then be forwarded to you.
You complete your tax return and claim the RTO from the ATO.
The State government pays the state component of NRI to your NRAS Participant following issue of the Federal Government RTO Certificate. The funds will then be deposited into your bank account.

Further NRAS Information

Further information regarding Incentive Payments and tax offsets can be found at:

The Federal Government NRAS website
The Australian Taxation Office website
Your Financial Advisor or Tax Accountant

Looking for an NRAS Expert to Help You Sell or Manage Your Investment Property?

Affinity Property has more than 12 years’ experience managing and selling NRAS properties. Not only that, but we are one of Australia’s largest accredited NRAS Property Managers. Furthermore, we have expertise working across multiple NRAS models in multiple NRAS rental properties.

We can advise you on all the important things you need to know. Firstly, which NRAS models are good. Secondly, NRAS models you should avoid. Thirdly, how to set up your NRAS property management arrangements to best safeguard your financial and legal interests.

Also, we can help you terminate NRAS if you want to rent your property at market rates before the official 10 year end of the Scheme.

Don’t Take Our Word For It

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8 Steps to Immediately Increase Profit with Your Investment Property

Affinity Property can help you structure and maximise the financial return for your NRAS investment property. Our highly qualified team includes property experts who can advise you on:

real estate sales & marketing
property accounting and tax advice on NRAS rental properties
financial planning & property finance
property management, maintenance & asset management
conveyancing and property legal matters
quantity surveying and tax depreciation

At Affinity, we understand the importance of unbiased information, education, and high-quality property advice. Our clients believe this is what sets us apart from other real estate agents. In addition, we manage a wide range of quality homes, duplexes, townhouses, units, and retirement living.

Moreover, our clients include first-time investors through to experienced landlords who own large property portfolios.

Clearly, our team is 100% focused on providing you with outstanding service and assistance.

Need Help With Your NRAS Property?

NRAS Landlords entrust us to reliably manage and sell their properties for greater profitability and less worries.

We get the highest possible rent from quality tenants with many properties leased within 48 hours!

We also consistently sell NRAS properties at prices significantly above the average appraisal.

Our comprehensive 100% Service Guarantee for Landlords ensures you get the best outcome for your investment property.

Like to know how much your NRAS property is worth right now? Contact us today.