does anyone remember the bashing i gave NRAS about 6 months ago?

well, clearly i was was out of line a little. :eek:

myself - and a few others - came to the conclusion that the $8000pa over 10 years was a tax deduction - that is, $8000 off your total income for the year. the wording was shocking and it was about as clear as mud.

:eek: BZZZZZT :eek:

NRAS scheme basically says if you can provide a residence to market at 20% under market rent, they will give you an $8000 deduction FROM YOUR TOTAL TAX PAYABLE.

think of it as a gift - like a baby bonus, stimulus cheque.....whatever. tax free.

you have to apply for NRAS though, or be buying off a developer with an NRAS allocation and manage it through an NRAS accredited PM. there are only "x" number of allocations allowed - but the developer i work closely with is securing 500 (five hundred) in WA between now and 2012.

so those deals that three forumites have shown interest in just got better.

and there's some pipeline news - this could also be applied to another dual occ development we're doing within 200m of the trainstation, 300m to shops and schools and freeway on-ramp and less than 1km to the beach.

can anyone say "CF+" and "high growth" in the same sentence? :cool:
$8K vs 20%

Anyone renting something out that goes for $40K a year. That about $800/pw.

Its a massive subsidy. Only issue is dealing with tenants who can't afford market rents.

Somehow I get the feeling this is a free-kick to developers who get the allocations not so much to investors since the value will be added to the sale price....
income details attached. there's actually minimums and maximums here - and if you exceed the maximum, you're given 12 months to get it under again - takes into account things like going over the cap because of a capital gain realisation etc - which is really very open minded considering precedent.

essentially - you're around $80-$120 a week NET in the black after your 20% rent deduction. the renters have to be able to afford $300 a week BEFORE centrelink benefits are applied.

also, 3/4 of it is federal funding, so you can ITWV montly, and the other 1/4 is annually because it's state funded - that's a huge help to cashflow.

this hasn't been posted in Caveat Emptor - this is purely an innovative technique for new dwellings to become neutral or positive with their holding costs. i feel obliged to correct my previous prejudices and incorrect slander because i made them on a public forum and am worred that others may have acted or decided on a position according to my preaching.

if you want specific details on the WA property this applies to, please contact me via my website. i won't be getting into it here, thanks. ;)


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A family income can be as high as $130,000 and still qualify to rent these NRAS properties.

The $8600 subsidy is a refundable tax offset. This means that you will get $8600 back from the government whether you pay tax or not.

I will be purchasing an NRAS property through a developer in Loganlea, Brisbane. It is well located on a new estate, close to rail, primary and high schools, shopping centre, hospital, TAFE and Uni. The developer said that they had to meet fairly strict standards when it came to location. There is a maximum of 30% NRAS properties allowed on their estate. This reduces the chance of "ghettos" developing.
can you chose who manages your property? if no who are the managers?

what do they charge? who selects the tenants?

are the properties priced above market value?
can you chose who manages your property? if no who are the managers?

what do they charge? who selects the tenants?

are the properties priced above market value?

There is a 10% plus GST charge to manage your property. You get more "bang for your bucks" for the 10% than if you used a normal manager who usually charges between 7 and 8%. I think (not sure) that the 10% includes insurance plus guaranteed rent if you don't have a tenant. You may be able to select your own manager but this is not common. I'm sure that you have to use the manager as prescribed by government legislation. A government body selects the tenants as they must meet strict criteria. I've been told that there is a long waiting list of potential tenants. Most of the tenants are not low income or unemployable.

The properties are market value. The group I'm involved with will be getting a presentation from a developer of NRAS property on 15/2. I'll be able to give people more information after the meeting.
NRAS sounds pretty good?

We're new to the NRAS idea, but already spent a few hours looking into it, met with someone who took us right through it, met with a lender who has raised some questions about it. So far the scheme looks very attractive, but need to ensure its a good development in a good area, and the organsation managing your property is not also involved in social housing. If you don't get that right, I think you're running at higher risk. But otherwise, the return is amazing and its positively geared from day one! Nothing can compete with that. But keen to hear from anyone with experience in it, or any negative comments - but need to have done your homework first! Read many negative comments on other forums where its clear the person has not investigated the rules
NRAS............only ok for super funds or low gearing

yeah, I thought that would get a few clicks

In all the hoo haa of another attempt at fixing our affordable housing scheme ( similar to the equity scheme a few years back, this is likely to not really do much for those that need the housing

Try getting "reasonable" finance for these things and you will quickly see why Im still very very unconvinced of these things as a separate asset class.

The lack of normalish finance will hold back any cap gain and therefore stifle any youngish investor looking to leap frog.

Buy them in an SMSF or with low gearing outside of SMSF as a cashflow diversification, yeah ok.

Just my rant for the seeing too many promoters looking to make a buck without the OBVIOUS POS disclosure


Is your only concern the lack of big name lending with "normal" conditions? I know this has been an issue for the past 6 months, but some big name lenders seem to be getting onboard. If that issue was out of the way, so investors inthe future wouldn't have an issue getting money, so you have other concerns?
I have briefly looked into the NRAS deal and it looks like a reasonable deal however one needs to consider the following.

  • finance is limited to only a few banks
    a larger deposit is required
    works well with a lower priced property as the cash back is a greater percentage of the rent
    you can apply for any property to be NRAS approved however this process can take around eight weeks

Therefore, I believe this would have been a great scheme if we had better bank corporation. Those that want to still pursue this option we can help with sourcing land and building and perhaps creating some equity along the way as well as taking advantage of the Government handout.
Hi Paul

Im not saying you cant get money but when only a few lenders will do limited products and/or LVRs, you will end up with a compromised or "hobbled" security. A great comparison is student specific accom on strata.

Until the lenders become more accepting ( and they may) any client that comes to me wanting money for these (and they have longish investing horizon( will have a hard time to convince me to get my commission :)

Rolf, a developer i work with runs NRAS to regulars without SMSFs....?

you just need an NRAS trained/approved PM to manage it and you can pick the tenant.

no different LVRs, no minimum account balances....and CF+.
Not my experience I must say

I take anything in finance from agents and developers with a pound of salt......

Comm resi dont like em at all

Suncorp case by case for exist client to max 80

ING no

NAB Case by case max 75 to 80

ABL retail no

WBC retail no

Stg Retail no

various mortgage managers, no

I think there is still a fear factor of tainted security,and things may get better, though some lenders like Suncorp have gone the other way in recent weeks.

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Buyers beware.....

Just been reading up on NRAS and noticed the following on their website (

"There is no requirement under the Scheme for the incentives to be passed on to the owners of the properties. The arrangements between dwelling owners and approved participants are a matter for those parties and will not be facilitated or prescribed by the Australian Government."

I'm also guessing that the banks don't want to touch this asset style due to the fact that that provision of the Incentive is dependent on satisfactory completion of all conditions and compliance requirements under the Scheme.

In short if the your not compliant no tax free $8672- mean while your rent has been reduced by 20%.
okay guys - whatever......

to qualify you must use an NRAS approved PM - this ensures the tenants fit the salary caps according to who is living there etc.

NRAS is an allocation. you are buying a property as a freehold strata or green title. the property zoning doesn't change but the NRAS allocation is only for 10 years.

this is not some sort of quasi-state housing setup.

but hey, permeate the myth at will. it'll leave more for me to invest in.
In short if the your not compliant no tax free $8672- mean while your rent has been reduced by 20%.

in short, you're a fool if you think it's that black and white.

the DEVELOPER IS ASSIGNED "x" NUMBER OF ALLOCATIONS, and you purchase a house + allocation from the developer.

you stay compliant by using an NRAS approved PM and your tenant remains under the NRAS salary cap.

why would you put a tenant in that doesn't comply? and if they don't they have 12 months to comply....?

if you lose your compliance, your rent jumps 20%.

you've have to a freaking numpty to fall into a trap like that.

thanks for the scare campaign. always good to have a de-bunker on board.