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:
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.
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.
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
Incentive values have reduced for the 2021-22 NRAS year from the prior year and are listed below.
|Australian Government Contribution
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.
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.
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:
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.
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Clearly, our team is 100% focused on providing you with outstanding service and assistance.
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