The National Rental Affordability Scheme explained

Across Australia, housing our growing population in areas close to centres of employment, essential services and desirable amenities is becoming increasingly difficult to do in an affordable way - as a result people tend to seek more affordable areas to live further away resulting in longer commutes, less time for people to spend with families or on social activities.

Providing additional amenity in these areas usually takes a long time and costs a lot of money to develop and unfortunately, in today's political climate, will only be developed if these areas are in marginal electorates. I'll leave that discussion for another time.  To combat the housing affordability issue in a more timely and effective manner, the Federal Government created the National Rental Affordability Scheme (NRAS) which commenced in 2008.  It seems to provide a method and incentive for Australian property investors to buy new property (off the plan), whilst stimulating the economy, building industry nationally and improving the availability of quality rental housing in more desirable areas.  

According to the NRAS Australia website, The NRAS has been designed to:

  • encourage investors to develop additional new houses for the rental market.
  • provide an affordable rent program for average Australian wage earners as individuals, couples or families. It is not social housing.
  • yield higher than usual returns for investors in the residential property market.
  • increase the number of rental dwellings built through the stimulation of demand and investment, while supporting the building industry, related jobs and the Australia economy.
  • The Government aims to achieve this by providing a tax incentive for investors in NRAS properties in return for the properties being rented at a discounted rate.

It is important to stress that NRAS properties are not designed to be social or housing commission style properties, but more so, they are designed to provide accessibility to affordable rental housing for low to moderate income tenants.  One example of the importance for this scheme is to provide professionals in the essential services sector - such as ambulance officers and firefighters - who need to live close to their work place.

Due to the popularity of NRAS properties, a series of strict guidelines are in place to ensure the people who need these types of properties most are catered for accordingly.  NRAS properties are overseen by NRAS tenancy managers who assess tenant incomes upon initial application and do so on an ongoing basis, ensuring the scheme remains relevant to those most in need.

The NRAS is funded by the Federal Government for up to 50,000 dwellings and will come to an end for new investments on 30 June 2016. Owners of NRAS properties will continue to have access to the tax incentives on offer as part of the scheme for 10 years post the land/strata title transfer date.


Sources and further reading


Development & Planning

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Policy, Culture & Opinion

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