National Rental Affordability Scheme
Encyclopedia
The National Rental Affordability Scheme (NRAS) is an Australia
n Government initiative to stimulate the supply of new affordable rental dwellings.
The Scheme offers annual incentive
s for ten years (indexed annually to the rental component of the CPI
).
The two key elements of the incentive are:
The Incentive is provided annually for ten years and is indexed based upon the rental component of the CPI index. The most recent increase was 5.4%.
Incentives are provided on the condition that throughout the ten year period the dwelling is rented at 20 per cent below the market rate to eligible low and moderate income households.
The Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) is responsible for the implementation and ongoing management of NRAS, in consultation with the Australian Taxation Office
.
In addition to this, many State and Local Governments have provided generous planning incentives where NRAS approved dwellings are to be built.
Currently, housing affordability is a problem in Australia. For society to function people need to live affordably in or around areas where they work. Key worker
s such as nurses, teachers, police officers, fire fighters, ambulance operators and other members of society need to be able to access housing which is affordable. This generally means that they do not spend more than 30% of their household income on rent
.
The incentive is available to nearly all dwelling
types such as houses, apartments, villas, flats and town houses.
in affordable housing
, it is not directly available to small-scale, private, individual investors in the rental property market. Under Round Three of the scheme which is currently running, direct applications can only be made by those with 1,000 or more dwellings. However, those with developments under 1,000 are sill able to access the scheme through an Approved NRAS Participant which allows all sized developments large and small access to the scheme, and importantly allows NRAS registered housing to be bought and sold by developer
s and investors while still remaining NRAS compliant.
The Commonwealth has identified 1.5 million Australian Households as eligible for assistance under the NRAS Scheme.
Dwellings will be rented to ‘eligible tenants’.
Dwellings will be rented for a period of 10 years.
Dwellings will be rented at a rate that is at least 20% below market rate.
Dwellings must either:
not have been lived in as a residence or
not have been lived in as a residence since having been made fit for occupancy where otherwise the dwelling was recognised as being uninhabitable or
if it has been converted to create additional residences, then a part of the dwelling or building that is capable of being lived in as a separate residence must not have been lived in as a separate residence.
Dwellings will comply with State, Territory and Local Government planning and building code
s and requirements.
proposed a temporary levy that would raise $1.8 billion to help pay for the reconstruction of roads, rail and bridges in damaged areas and take effect from 1 July, 2011. Part of her proposal included cutting 15,000 dwellings from the NRAS, but the Australian Greens
negotiated with the Government, which secured the dwellings and restored $264 million to NRAS.
Australia
Australia , officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands in the Indian and Pacific Oceans. It is the world's sixth-largest country by total area...
n Government initiative to stimulate the supply of new affordable rental dwellings.
The Scheme offers annual incentive
Incentive
In economics and sociology, an incentive is any factor that enables or motivates a particular course of action, or counts as a reason for preferring one choice to the alternatives. It is an expectation that encourages people to behave in a certain way...
s for ten years (indexed annually to the rental component of the CPI
CPI
A consumer price index is a measure of the average price of consumer goods and services purchased by householdsCPI may also stand for:*Central Port Injection, see fuel injection...
).
The two key elements of the incentive are:
- A Commonwealth Government Incentive currently of $6,855 per dwelling per year as a refundable tax offset or payment (this implies that the incentives are tax-free); and
- A State or Territory Government Incentive currently of $2,285 per dwelling per year in direct or in kind financial support.
The Incentive is provided annually for ten years and is indexed based upon the rental component of the CPI index. The most recent increase was 5.4%.
Incentives are provided on the condition that throughout the ten year period the dwelling is rented at 20 per cent below the market rate to eligible low and moderate income households.
The Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) is responsible for the implementation and ongoing management of NRAS, in consultation with the Australian Taxation Office
Australian Taxation Office
The Australian Taxation Office is an Australian Government statutory agency and the principal revenue collection body for the Australian Government. The ATO has responsibility for administering the Australian federal taxation system and superannuation legislation...
.
In addition to this, many State and Local Governments have provided generous planning incentives where NRAS approved dwellings are to be built.
Currently, housing affordability is a problem in Australia. For society to function people need to live affordably in or around areas where they work. Key worker
Key worker
A key worker is a public sector employee who is considered to provide an essential service. The term is often used in the United Kingdom in the context of those essential workers who may find it difficult to buy property in the area where they work....
s such as nurses, teachers, police officers, fire fighters, ambulance operators and other members of society need to be able to access housing which is affordable. This generally means that they do not spend more than 30% of their household income on rent
Renting
Renting is an agreement where a payment is made for the temporary use of a good, service or property owned by another. A gross lease is when the tenant pays a flat rental amount and the landlord pays for all property charges regularly incurred by the ownership from landowners...
.
The incentive is available to nearly all dwelling
Dwelling
Dwelling, as well as being a term for a house, or for living somewhere, or for lingering somewhere, is a philosophical concept which was developed by Martin Heidegger. Dwelling is about making yourself at home where the home itself is a building that is a house...
types such as houses, apartments, villas, flats and town houses.
How to Access the NRAS Program
As the NRAS aims to encourage large-scale investmentInvestment
Investment has different meanings in finance and economics. Finance investment is putting money into something with the expectation of gain, that upon thorough analysis, has a high degree of security for the principal amount, as well as security of return, within an expected period of time...
in affordable housing
Affordable housing
Affordable housing is a term used to describe dwelling units whose total housing costs are deemed "affordable" to those that have a median income. Although the term is often applied to rental housing that is within the financial means of those in the lower income ranges of a geographical area, the...
, it is not directly available to small-scale, private, individual investors in the rental property market. Under Round Three of the scheme which is currently running, direct applications can only be made by those with 1,000 or more dwellings. However, those with developments under 1,000 are sill able to access the scheme through an Approved NRAS Participant which allows all sized developments large and small access to the scheme, and importantly allows NRAS registered housing to be bought and sold by developer
Developer
Developer may refer to:*Software developer, one who programs computers or designs the system to match the requirements of a systems analyst*Game developer, a person or business involved in game development, the process of designing and creating games...
s and investors while still remaining NRAS compliant.
Who Is Eligible to Rent the Dwellings?
| Household type | Initial income limit $ | Upper income limit $ |
|---|---|---|
| One adult | 42,718 | 53,398 |
| 2 adults | 59,057 | 73,822 |
| 3 adults | 75,396 | 94,245 |
| 4 adults | 91,735 | 114,669 |
| Sole parent with 1 child | 59,099 | 73,874 |
| Sole parent with 2 children | 73,267 | 91,584 |
| Sole parent with 3 children | 87,435 | 109,294 |
| Couple with 1 child | 73,225 | 91,532 |
| Couple with 2 children | 87,393 | 109,242 |
| Couple with 3 children | 101,561 | 126,952 |
The Commonwealth has identified 1.5 million Australian Households as eligible for assistance under the NRAS Scheme.
Mandatory Requirements
Mandatory requirements include:Dwellings will be rented to ‘eligible tenants’.
Dwellings will be rented for a period of 10 years.
Dwellings will be rented at a rate that is at least 20% below market rate.
Dwellings must either:
not have been lived in as a residence or
not have been lived in as a residence since having been made fit for occupancy where otherwise the dwelling was recognised as being uninhabitable or
if it has been converted to create additional residences, then a part of the dwelling or building that is capable of being lived in as a separate residence must not have been lived in as a separate residence.
Dwellings will comply with State, Territory and Local Government planning and building code
Building code
A building code, or building control, is a set of rules that specify the minimum acceptable level of safety for constructed objects such as buildings and nonbuilding structures. The main purpose of building codes are to protect public health, safety and general welfare as they relate to the...
s and requirements.
Recent Developments
Subsequent to the 2010-2011 Queensland floods, Julia GillardJulia Gillard
Julia Eileen Gillard is the 27th and current Prime Minister of Australia, in office since June 2010.Gillard was born in Barry, Vale of Glamorgan, Wales and migrated with her family to Adelaide, Australia in 1966, attending Mitcham Demonstration School and Unley High School. In 1982 Gillard moved...
proposed a temporary levy that would raise $1.8 billion to help pay for the reconstruction of roads, rail and bridges in damaged areas and take effect from 1 July, 2011. Part of her proposal included cutting 15,000 dwellings from the NRAS, but the Australian Greens
Australian Greens
The Australian Greens, commonly known as The Greens, is an Australian green political party.The party was formed in 1992; however, its origins can be traced to the early environmental movement in Australia and the formation of the United Tasmania Group , the first Green party in the world, which...
negotiated with the Government, which secured the dwellings and restored $264 million to NRAS.
External links
- Australian Government NRAS website
- http://www.nrasaustralia.com.au