NRAS Explained

NRAS Explained The National Rental Affordability Scheme (NRAS) will help increase the supply of affordable rental dwellings by up to 50 000 by June 2012. Rent for these properties will be charged at 20 per cent below the market rate for eligible tenants.

Governments, the business sector and community organisations recognise that housing affordability is an issue of significant community concern. The growing cost of housing is having a serious impact on the ability of many Australians to meet their financial commitments.

The Australian Government is providing Incentives to:

• increase the supply of affordable rental dwellings;
• reduce rental costs for low to moderate income households;
• encourage large scale investment and innovative delivery of affordable housing; and
• Stimulate the construction industry at a time of economic downturn.

The National Rental Affordability Scheme offers annual Incentives for ten years. The two key elements are:

• A Commonwealth Government Incentive currently of $ $7,143per dwelling per year as a refundable tax offset or payment; and
• A State or Territory Government Incentive currently of $2,381per dwelling per year in direct or in kind financial support.

The tenant eligibility criteria will ensure the National Rental Affordability Scheme is open to families on low and moderate incomes, individuals who are looking to rent a property for the first time, and singles in private or public rental accommodation, including people working or undertaking study or training.

Please note that the ‘initial income limit’ column, highlights the Gross Annual Income that the household must not have exceeded in the 12 month prior to signing the tenancy agreement.

The ‘upper income limit’ column, highlights the $ figure (25% above the initial income limit) that tenants must not exceed to remain NRAS eligible. As discussed earlier NRAS tenants are given a grace period should they exceed this figure.

Eligible tenants' income must be equal to or less than the initial income limit when they become a tenant of an NRAS dwelling. Income may increase up to 25 per cent (the upper income limit) before their eligibility is affected.

For NRAS purposes, a household is considered to be all persons ordinarily residing in the dwelling. The Department therefore requires all persons who ordinarily reside in an approved rental dwelling to have their income included as a member of the one household, in accordance with the income limits.

Comprehensive case study and the income levels.