NRAS was designed to boost the building industry and increase the supply of housing. However it does also come with incentives to make it an attractive investment opportunity.
It was designed in such a way to boost the building industry by applying to newly constructed dwellings and increasing the supply of housing. While it has that focus, it is investors that the Government wanted to attract to purchase these properties, so it comes with incentives to make it an attractive investment opportunity.
Under the NRAS scheme the property is rented for 20% below the market rent, for low to middle income earners. To make up this shortfall in rental income the Government supplements this with annual tax free income which is approximately $10,000 per year offered as a tax rebate.
NRAS investors have managers that administer the scheme. These are called Consortiums which are approved by the Government to provide services such as selecting tenants, assessing continued eligibility and property maintenance. The Consortium ensures that it continues to comply with NRAS, enabling the investor to continue to get the benefit of incentives under the scheme.
Homes involved in this scheme are new homes and units in areas that have neighbours with owner occupied properties and ordinary rentals. Most are in the major metropolitan areas, given that the major purpose of the scheme is to make renting more affordable for ordinary people.
State Custodians Mortgage Company can provide loans to enable you to purchase a NRAS property. Each lender has its own list of approved Consortiums that they will accept so it is important to have this information handy when you are enquiring about finance. If you have a self-managed super fund, an NRAS property may be an investment option. State Custodians has a very competitive Self-Managed Super Fund loan for you to consider.
For more information about the scheme you can visit the government website: www.fahcsia.gov.au/our-responsibilities/housing-support/programs-services/national-rental-affordability-scheme.