Australia: Australian Government Re-Opens National Rental Affordability Scheme (NRAS) For Round 2 Applications

Last Updated: 24 February 2009
Article by Stephen O'Flynn

The National Rental Affordability Scheme is an Australian Government initiative to stimulate the supply of up to 50,000 new affordable rental dwellings at a cost of $623 million over the next four years.

The National Rental Affordability Scheme will be implemented in two phases:

1) The establishment phase will be run from July 2008 to June 2010 and provides for the allocation of 11,000 National Rental Incentives (NRI's); and

2) The expansion phase will be run from July 2010 to June 2012 and provides for the allocation of 39,000 NRI's.

Generous tax offsets and incentives come from two sources for those willing to deliver the scheme, namely the Commonwealth and State Government. Those participating in round one of the NRAS were bestowed a refundable tax offset of $6,000 and further financial contribution of $2,000 and a waiving of CGT consequences from receipt of incentives provided, for each dwelling they made available at a 20% discount to market rate for the benefit of low and moderate income households targeted by the scheme.

There are five Assessment Criteria which applicants must address in order to qualify for National Rental Incentives under the Scheme. These Criteria are:

  • There is a demonstrated need for the Proposal
  • The Proposal addresses Priority Areas of Interest
  • The Proposal delivers accessibility and sustainability outcomes
  • The Consortium or Organisation has demonstrated capacity and experience
  • The Proposal is financial viable

Application to participate in the NRAS must be submitted between the opening and closing dates for each of the rounds listed below:

Round 1 – Establishment phase: Now closed. 2,800 incentives were offered.

Round 2 – Establishment phase: Closes 27 March 2009. 8,200 offers to be made.

Round 3 – Expansion phase: Opens early 2009/10 financial year. 39,000 offers to be made.

It has also been suggested that another 50,000 NRI's may be issued, subject to demand, after 2012 thus creating a fourth round to further implement the expansion phase.

The Commonwealth Government will be holding various information session about the NRAS and will explore potential funding and operational scenarios for the Scheme. The Melbourne session is on 3 February 2009 at the State Library of Victoria from 10am to12 noon. Enrolment is required by emailing

Applications for allocations of National Rental Incentives available under the Scheme need to comply with mandatory requirements and guidelines which apply to each round of applications and the year of the Scheme's operation.

Mandatory requirements include:

  • Dwellings to 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 percent below the market rate.
  • Dwellings must either:
  1. Not have been lived in as a residence; or
  2. 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
  3. 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 codes and requirements.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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