NRAS
The National Rent Affordability Scheme is an Australian Government initiative to stimulate the supply of up to 50 000 new affordable rental dwellings. Under the scheme successful investors will be eligible to receive a National Rental Incentive for each approved dwelling, on the condition that they are rented to eligible low and middle income households at 20 per cent below market rates.
Simply, the government pays a subsidy to the owners of an NRAS approved dwelling. In return, the Owner of the property must rent the property out at 20% below market rent. There are rules that govern the types of properties, the locality, how they are built and who can live there.
The Scheme offers annual Incentives for ten years. The two key elements of the incentives are:
- A Commonwealth Government Incentive currently of $7,143 per dwelling per year as a refundable tax offset or payment; and
- A State or Territory Government Incentive currently of $2,381 per dwelling per year in direct or in kind financial support.
How does the incentive work ?
- An incentive, in the form of a refundable tax offsets of $9,524 per dwelling for 10 years.
- The incentive, is paid to owners as a tax offset certificate at the end of each tax year. Both the Federal and State Governments contribute to the Tax Offset.
- The Property Manager sends a letter of compliance to the Government stating that your property was rented out in accordance with the terms and conditions of NRAS.
- Then the Government, through the ATO, sends the tax offset certificates valued at $9,524 to you.
- This refundable tax offsets either directly reduces tax you pay OR if you do not pay any tax is paid as a cash payment.
- The incentives are paid annually after you lodge your tax return.
Tenancy Management & Selection
Tenancy Management is handled by several government approved community property
mangers, some include:
- Aspire Housing Group Pty Ltd
- Questus Property
- QAPC (Queensland Affordable Property Commission)
NRAS and SMSF Loans
SMSF Loans is pleased to advise that we are now in a position to assist with the purchase of NRAS properties via a SMSF.
NRAS investment via a SMSF brings together two complex and sophisticated components. With the vast majority of Lenders, and Mortgage Brokers, yet to master either one of these areas it is little wonder that virtually none have been able to combione the two.
SMSF Loans has been working with Lenders for over a year to create a solution and we now have our first Lender ready to accept transactions. Currently six Consortium have been approved with others being assessed for acceptance by the Lender.
Despite some mixed messages in the marketplace, to the best of our knowledge and belief this is the only lending solution currently available to SMSF's for investment into NRAS securities.
Please Contact Us if you have a scenario to run or have any questions relating to SMSF lending for a NRAS property.
House and Land Packages
Possibly one of the rarest commodities in the SMSF property investment landscape is the availability of quality new House and Land packages in high growth areas.
It's not that these sorts of properties don't exist. It's simply that most Developers do not have sufficient capital to allow them to complete house and land packages using their own funds and sell them under a single contract. Instead they rely on the purchaser to utilise a 'construction loan' and make progress payments throughout the construction period.
Of course this type of financing arrangement is not available to a SMSF due to the requirements of the SIS Act as it relates to the acquisition of a single indivisible asset and prohibits the SMSF improving the asset (the underlying land being the asset in the case of a traditional 'two part contract' house and land construction).
We are etxremely pleased to announce that I-Invest Property has been working with some leading house and land developers and can now facilitate limited numbers of single contract house and land packages specifically for investment by SMSF.
Can I by an NRAS Approved property through my SMSF (Self Managed Super Fund) click below to find out more