How Do NRAS Incentive Payments Work?

What is NRAS?

The National Rental Affordability Scheme (‘NRAS’ or ‘the Scheme’) is an Australian Government affordable housing initiative, delivered in partnership with state and territory governments. NRAS commenced on 1 July 2008.

The Scheme:

provides annual financial incentives to investors for up to ten years;
dwellings must be rented to eligible NRAS tenants at 80 per cent or less of the market value rent;
was intended to increase the supply of affordable rental housing;
reduces the rental costs for low to moderate income households;
was designed to encourage large-scale investment in affordable rental housing.

NRAS homes are not social housing – they are affordable private rental homes. The Scheme will conclude in 2026.

2019-2020 NRAS Incentive Payment

The NRAS Year is offset from the financial year by two months and runs from 1st of May to 30th April each year. The Federal Government contributes 75% of the National Rental Incentive (NRI) for NRAS each year, with the other 25% being contributed by the State and Territory Governments. The NRI is indexed annually to the CPI and is $11,248.09 for the 2019 – 2020 NRAS Year.

Please click here to view the Australian Government NRAS Incentive 2020 indexation fact sheet plus all prior year incentive payments.

Federal Government Incentive Payment

The Federal Government’s portion is claimed as a Refundable Tax Offset (RTO) on your income tax return and is paid directly to you by the Australian Taxation Office (ATO) through the NRAS Approved Participant. In past years the Federal Government has issued RTO (Refundable Tax Offset) certificates to your NRAS Participant by late July and the certificates are then forwarded to you (the NRAS Investor). For more information about the timing of claims being lodged, please contact your NRAS Approved Participant or contact Affinity Property for further information.

You need to claim your RTO in your Tax Return depending on the entity in which your property was purchased:

State Government Incentive Payment

The State Government pays the state component of NRI to the NRAS participant following the issue of the Federal Government RTO Certificate. The State Government funds are then deposited into your bank account.

Pro rata Payments

The NRAS Incentive may be paid on a pro rata basis where:

The property has not been active for the entire year (ie it only became available to rent partway through the year)
The property did not meet compliance requirements for some of the year (it was rented at an ineligible rent or to an ineligible tenant)
The property was vacant for in excess of 91 days cumulatively throughout the year or consecutively over two consecutive NRAS years (incentive is reduced on a pro rata basis for any vacancies over 91 days)
The property was transferred 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 Timings for your 2020 NRAS Incentive Payment

NRAS Year ends 30th April 2020.
Your approved NRAS Participant* should lodge the bulk incentive claim before 30 June 2020.
The Federal Government issues RTO (Refundable Tax Offset) certificates to your NRAS Participant (hopefully before 30 September 2020) and the certificates are then 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 and the funds are deposited into your account.

NRAS Incentive Payment for 2020-21

Incentive values for the 2020-21 NRAS year are listed below.

Contributed by	Amount
Australian Government Contribution	$8,452.94
State/Territory Contribution	$2,817.65
Total	$11,270.59

Further NRAS Information

For further information regarding Incentive Payments:

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

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