The National Rental Affordability Scheme (NRAS) is a 2007 Federal election commitment designed to encourage large-scale investment in affordable housing.
The NRAS offers tax incentives to providers of new dwellings on the condition that they are rented to low and moderate income households for at least 20% below market rates.
Generally, eligible tenants are those whose income falls below the upper limits. If a tenant’s income exceeds the upper limit for two years in a row, they cease to be an eligible tenant.
Who is an ‘eligible tenant’?
A variety of household eligibility income limits for 2015-16 are set out below.
|Household Composition||Initial Income Eligibility||Ongoing Income Eligibility|
|Sole parent with one child||66,274||82,843|
|Sole parent with 2 children||82,163||102,704|
|Sole parent with 3 children||98,052||122,565|
|Couple with one child||82,117||102,647|
|Couple with 2 children||98,006||122,508|
|Couple with 3 children||113,895||142,369|
National Rental Affordability Scheme Incentives
The National Rental Affordability Scheme year runs from 1 May to 30 April. The NRAS offers annual incentives for a period of 10 years. These include a refundable tax offset from the Federal Government for each year over 10 years if the requirements for the tax offset are met.
|2015-16 NRAS Tax Offset||Maximum Amount|
In addition, the relevant State or Territory Government will make a contribution $2,729.26 per dwelling per year in 2015-16 by way of payment or support of an equal value (such as discount on land taxes, stamp duty, etc) if the requirements for the NRAS are met.
It is worth noting that in the 2014/15 Federal Budget, the government announced that it is not preceding with the final round of the NRAS. Incentives already allocated through the scheme will continue to be paid for up to 10 years as long as eligibility requirements are met.