Eligible dwellings and tenants

• What is an eligible NRAS dwelling?
• How is market rent determined for an eligible dwelling?
• What is the typical length of a lease?
• Who is eligible to rent an NRAS dwelling?
• What are the income levels for NRAS tenants?
• How are tenants selected for NRAS dwellings?
• Can tenants be evicted?
• Where can I get more information about the potential financial benefits of investing in NRAS?

The Scheme seeks to address the shortage of affordable rental housing by offering annual tax-free incentives to the business sector and community organisations to build and rent affordable dwellings to low and moderate income households at below-market rates for up to 10 years.

What is an eligible NRAS dwelling?

NRAS dwellings must meet certain criteria:

• The dwelling must be brand new – that is, it must not have been previously tenanted in its current condition.
• The dwelling must be rented at a rate that is at least 20 per cent below the prevailing market rate.
• An NRAS dwelling must be self contained. It must be demonstrated that a tenant, or tenants, would be able to live independently within the dwelling and not need to access external or common facilities.
• The dwelling must provide the following facilities:
• a bathroom and kitchen;
• a bedroom and living space (the bedroom and living space may be combined within a single large room, as in the case of studio apartments); and
• a separate lockable entrance which can be accessed either externally or via an internal hallway or common entrance. The entrance cannot be accessible only via entry to another dwelling.
• A dwelling which does not provide private facilities cannot be considered a rental dwelling or a subsidiary dwelling under the Scheme and will not be eligible for the National Rental Incentive.
• An eligible dwelling does not include a caravan, houseboat or other kind of mobile dwelling.
• The tenants of eligible dwellings must meet the income requirements prescribed by the Scheme.

How is market rent determined for an eligible dwelling?

In years one, four and seven of the Scheme participants are required to seek a written valuation from a registered valuer to determine the market rent for the dwelling.
In the other years, participants may review the rent based on information about the location, type and amenity of the approved dwelling and supported by publicly available data about comparative rental rates.

What is the typical length of a lease?

Where appropriate, participants are encouraged to provide longer leases to improve security of tenure for tenants. Longer leases may also benefit owners and managers by reducing vacancy rates and minimising costs associated with the end of leases and re-tenanting.
Approved participants are not required to provide longer term leases or other rights for tenants beyond those which are required by relevant landlord and tenant legislation. NRAS does not provide tenants with any special rights over and above the relevant residential tenancy legislation in the State or Territory where the dwelling is located.

Who is eligible to rent an NRAS dwelling?

NRAS aims to provide affordable rental housing for low to moderate income earners including key and essential service workers, such as childcare workers, nurses, police officers, fire-fighters and paramedics.

What are the income levels for NRAS tenants?

Income levels for eligible NRAS tenants are generous and accommodate a range of low to moderate income earners. The income limit for a single adult is $44,128 per annum, increasing to $104,913 per annum for a couple with three children. NRAS also allows for tenant salary increases of 25 per cent above the income limits.
Tenant income limits are indexed annually in accordance with the All Groups component of the Consumer Price Index.

For example, a couple, with three children, earning a gross income of $104,913 per annum would be eligible to rent an NRAS dwelling. With the income increase allowance of 25 per cent, this family could earn up to $131,141 for two years before they become ineligible for the discounted rent.

How are tenants selected for NRAS dwellings?

Tenants for NRAS properties are selected by investors and their tenancy managers, except in Queensland. Queensland tenants are selected from the Queensland Government’s One Social Housing Register.
Tenancy managers select tenants and maintain waiting lists for NRAS homes with assessment and selection of tenants being at the discretion of the tenancy management organisation. As long as NRAS eligibility requirements are met, tenancy decisions will be made in line with their usual policies and processes.

Can tenants be evicted?

Tenancy management organisations under the Scheme must comply with the residential tenancy legislation and relevant tenancy and property management regulations in the State or Territory in which the dwelling is located. Any eviction must be in accordance with the residential tenancy legislation and regulations.