Government Property Investment Scheme
What is this scheme?
The National Rental Affordability Scheme or NRAS was launched to provide support and funding to increase the supply of affordable rental accommodation. The aim is to reduce rental costs for low to mid income earners and to encourage investment for Australians to provide additional affordable housing.
Ex Treasurer Wayne Swan launched the NRAS scheme in July 2008, this was introduced due to lack of building new residential accommodation for Australia’s lower income earners.
How It Works
Once a property is allocated NRAS status by the government the property owner reduces the rent by 20%.
In return for the discount offered to tenants, the government will provide an incentive of $9,140 per annum (tax free) to the owner. The compensation is CPI indexed and will increase for up to 10 years.
Eligible tenants for the scheme will be determined by their income.
A tenant may not earn more than $125 000 to qualify.
The Advantages
- Most NRAS properties are cash flow positive
- The $9,140 National Rental Incentive for each rental dwelling will improve rental yields over conventional residential investment properties
- $90,000 Plus Tax Credits Over 10 Years
- The National Rental Incentive is Tax Free!
- The incentive is indexed to the rental component of the Consumer Price Index (CPI)
- Further complements existing taxation arrangements when owning an investment property.
- 20% below market value rental and a number of eligible tenants will result in a reduced vacancy rate
- With a larger number of tenants to choose from, the investor can be more selective when selecting a tenant.
- Government Backing-Australian and State government backing for a period of 10 years.
- Secured Income Stream (10 Years)
To see if you qualify for an NRAS investment property please contact APPA today.
