What is NRAS all about?
What are the basic rules?
Who is Affordable Housing Consulting?
How much is the total incentive?
What is a Refundable Tax Offset?
What is Non Assessable Non Exempt Income?
When do I get paid?
What expense are there?
Can I use my own property manager?
What are the tenants like?
Will this affect tenant demand for my property?
Are there tax considerations I should consider?
Do I have to participate in the NRAS if I buy the property?
I want the property to remain in the NRAS, what next?
What happens after the 10 years?
I've got more questions, where do I go to find out more?
NRAS the National Rental Affordability Scheme and is a joint Commonwealth and State program aimed at increasing the supply of affordable rental housing for low to moderate income households.
The Scheme requires that the rent be charged at no greater than 80% of market rent and it must be let to an eligible tenant. You or your PM choose the tenant. Rent is indexed annually with a market rental valuation required at the end of year seven.
Affordable Housing Consulting (AHC) is a private business and is the Approved Participant for this property and undertakes the compliance obligations for the Scheme. Investors do not deal directly with the government department that administers the Scheme, AHC makes sure the rules of the NRAS are followed and investors are paid. We are governed by the NRAS Legislation and a code of conduct which can be found on our website.
In 2021 / 2022, the incentive is $11,124. $8,343 Refundable Tax Offset and $2,781 Non Assessable Non Exempt Income (Cash payment). Partial years attract partial payment. Payment relies on compliance with the Scheme rules.
This is the amount you claim through your tax return. It is not a deduction, it is paid as an offset to your tax obligations and if it exceeds your tax obligations the difference will be refunded to you. Can find more on the ATO website searching "NRAS"
This is the amount funded by the State Government and is paid as cash into your bank account. It is not assessable income (tax free) however you may not claim expenses incurred in earning this income.
The NRAS year runs from 1st May to 30th of April, the Refundable Tax Offset is typically issued in July or August and the State payment typically arrives a month later. AHC does not guarantee timing of payment.
AHC takes a share of the State payment equivalent to 12.5% of the NRAS Incentive to manage the compliance of the Scheme and a contract administration fee for $550 to establish your entitlement to the NRAS Incentive, we deduct this from your first state payment. A rental valuation will be required at the end of year seven.
No, AHC has a panel of property managers who are familiar with the Scheme rules and AHC's compliance software, the incumbent property manager is familiar with the tenant and the property and would be a good place to start.
Eligibility limits are quite generous, a single person may earn up to $52,790 and a couple with three children may earn up to $125,500, so in most cases the income profiles are similar to the neighbourhood
Because tenants are receiving a discounted rent, we find a greater than usual number of applicants and longer tenancies, which means fewer vacancies.
If you have any tax questions they should be directed to your accountant and you may find more detail by searching for NRAS on the ATO website.
No, although as with any property, if there is a tenant in the property you will need to comply with the Residential Tenancies Act, so you may wish to participate in the NRAS until the end of the tenancy.
There is no approval process and no upfront fee to be an investor of a property in the NRAS, contact AHC at email@example.com and we will answer any further questions you have and get you started.
The NRAS for your property ends and the agreement with AHC sunsets. You are no longer obliged to discount the rent to the tenant and you will not earn an incentive beyond that period. You will be entitled to an incentive for the portion of the NRAS year the property was active in the Scheme
AHC : https://nras.com.au, email: firstname.lastname@example.org