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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.  It is delivered in partnership with state and territory governments.

Summary of NRAS:

  • annual financial incentives are paid to investors for up to ten years TAX FREE;
  • dwellings must be rented to eligible NRAS tenants at 80 per cent 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;
  • the Scheme was designed to encourage large-scale investment in affordable rental housing.

NRAS homes are not social housing.  NRAS properties are owned predominantly by mum and dad investors.  They are rented as affordable private dwellings.  All rental property costs are paid by the owner, 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.  It is offset from the financial year by two months. The Federal Government contributes 75% of the National Rental Incentive (NRI) for NRAS each year.  The other 25% of the NRI is contributed by the State and Territory Governments.

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.

To view the Australian Government NRAS Incentive 2021 indexation fact sheet, plus all prior year incentive payments, please 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

The Federal Government portion is claimed through your income tax return by submitting a Refundable Tax Offset (RTO).  It is paid directly to you by the Australian Taxation Office (ATO).  The NRAS Approved Participant is responsible for supplying you with your NRAS RTO Certificate. The Federal Government issued RTO (Refundable Tax Offset) certificates to your NRAS Participant by late July in past years.  The RTO Certificates are then forwarded to you (the NRAS Investor).  If you would like more information about the timing of payment for claims in the current NRAS year, please contact your NRAS Approved Participant, or contact Affinity Property for further information.

 

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

State Government Incentive Payment

In Queensland, the State Government pays the state component of NRI to the NRAS participant.  This payment is made following the issue of the Federal Government RTO Certificate. The State Government funds are then deposited into your bank account.

Pro rata Payments

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

  1. NRAS Year ended on 30th April 2021.
  2. Your approved NRAS Participant* should have lodged the bulk incentive claim before 30 June 2021.
  3. 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.
  4. You complete your tax return and claim the RTO from the ATO.
  5. 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 can be found at:

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. We are one of Australia’s largest accredited NRAS Property Managers, and we have expertise working across multiple NRAS models.

We can advise you: which NRAS models are good; NRAS models you should avoid; and, how to set up your NRAS property management arrangements to best safeguard your financial and legal interests.

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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
  • 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. We manage a wide range of quality homes, duplexes, townhouses, units and retirement living.  Our clients include first time investors through to experienced landlords who own large property portfolios. 

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.

HOW MUCH IS MY NRAS PROPERTY WORTH RIGHT NOW? 

We’ll advise you how you can achieve the best price whether you are selling or leasing your property.

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