The National Rental Affordability Scheme NRAS) is a long term commitment by the
Australian Government to invest in affordable rental housing. The NRAS seeks to
address the shortage of affordable rental housing by offering financial
incentives to the business sector and community organizations to build and rent
dwellings to low and moderate income households at 20 per cent below-market rates
for 10 years. NRAS aims to increase the supply of new affordable rental
housing; reduce rental costs for low and moderate income households; and
encourage large scale investment and innovative delivery of affordable housing.
The Australian Government has committed $1 billion to the Scheme over four
years to stimulate construction of up to 50,000 high quality homes and
apartments, providing affordable private rental properties for Australians and
their families.
NRAS is a great opportunity for property
investors to have a property investment in a high capital growth area but still
receive the positive cash flow provided by the generous government grants. I
believe this is a small window of opportunity where a property investor can
build their asset base with no need to take a hit on their cash flow, in actual
fact you will increase your cash flow position. NRAS offers a substantial
annual tax-free incentive, the NRAS Incentive, for every dwelling built under
its auspices. Investors making property investment need to apply for NRAS
Incentives, and if offered, must agree to rent approved dwellings at 20 per
cent or more below current market rates, to low and moderate income households.
The NRAS Incentive is a funding stream not available to standard residential
property investors. Each approved dwelling attracts the NRAS Incentive
for 10 years, so long as investors continue to comply with conditions around
tenant eligibility and rent discounts. NRAS investors can expect to benefit
from the annual NRAS Incentive, rental yields and capital gain.
The NRAS program is also designed to provide a method and incentive for
property investors to build wealth through NRAS property investment, while also
stimulating the economy and the building industry across Australia. NRAS
property investment is like purchasing any other investment accepts it comes
with greater added benefits.
NRAS
property investment is a government program to solve crisis in housing
affordability. It encourages buying investment property with affordable rentals
to the renters. The NRAS Property Investment program creates a new class of
investment property which is fully freehold owned by the investor, while being
approved by the Government Agents for rental to qualifying families at a reduced
rent in return for significant annual tax credits and a ten year membership of
the program. The stated objective is to deliver 50,000 rental dwellings
over four years nationally. It is estimated by the Government that over 1.5
million households will be eligible for tenancies under the NRAS program,
giving the property purchasers a high level of secure rental demand. NRAS
property investments have similar value with the neighboring properties. This
makes buying this investment property more attractive to investors as
well as to the tenants.
