About the Scheme

• What is the National Rental Affordability Scheme?
• How does NRAS work?
• Who benefits from the Scheme?
• Who is eligible to participate in NRAS?
• Who can rent an NRAS dwelling?
• Who manages the Scheme?
• Where can I get more information about the potential financial benefits of investing in NRAS?

What is the National Rental Affordability Scheme?

The National Rental Affordability Scheme (NRAS) is a long term commitment by the Australian Government to investors prepared to build affordable rental housing.
NRAS seeks to address the shortage of affordable rental housing by offering tax-free financial incentives to the business sector and community organisations to build and rent dwellings to low and moderate income households at below-market rates for 10 years. It aims to:

• increase the supply of new affordable rental housing;
• reduce rental costs for low to moderate income households; and
• encourage large-scale investment and innovative management of affordable housing.

How does NRAS work?

NRAS provides a substantial annual tax-free incentive, called the National Rental Incentive, to the business sector and community organisations who build and rent dwellings to low and moderate income households at a rate that is a least 20 per cent below the prevailing market rate.

Current Incentive

The annual income-tax free Incentive is currently $9,524 per dwelling, and is indexed each year to the rental component of the CPI.
The Incentive comprises:

• an Australian Government contribution of $7,143 per dwelling per year (paid as a refundable tax offset or payment); and
• a State or Territory Government contribution of $2,381 per dwelling per year (in direct or in-kind financial support).

Who benefits from the Scheme?

NRAS aims to provide affordable rental housing for low to moderate households. Eligible individuals and families are able to rent NRAS dwellings at a discounted rate, making their rental housing more affordable.
NRAS is intended as a tax-free commercial investment option for participants while also increasing the supply of affordable housing in Australia. Investors in the Scheme may benefit from enhanced cash returns, annual rental incentive and reduced vacancy rates over the 10 year life of NRAS.

Who is eligible to participate in NRAS?

Potential participants in NRAS include financial institutions, investors, private developers, not-for-profit organisations and community housing providers who may build, own, finance or manage NRAS dwellings.

Who can rent an NRAS dwelling?

Income levels for eligible NRAS tenants 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.
For example a couple, with three children, earning a household income of $104,913 per year 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.

Who manages the Scheme?

The Department of Sustainability, Environment, Water, Population and Communities (SEWPaC) is responsible for the ongoing management of NRAS, in consultation with the Australian Taxation Office.
The Australian Government is working closely with State and Territory Governments, investors, financial institutions, property developers and not-for-profit housing providers to ensure the objectives of the Scheme are achieved.

Where can I get more information about the potential financial benefits of investing in NRAS?

The Australian Government has developed an Information for Investors publication specifically designed to provide potential investors with information about the Scheme and how NRAS can become part of an investment portfolio.