Some questions about NRAS

[godette]

Hello all! I'm looking at an NRAS property and if there's anyone out there who has experience with cash flows and how to claim the tax offset I'd reallly appreciate hearing from you. The ATO's website is Greek to me and the accountant I have isn't sure whether you can claim the Federal govt component of the rebate (about $7500) back as a fortnightly tax variation in your pay packet. Thanks very much in advance!

 

[Hillview]

Nras

Hi Godette,

Short answer is you can include the offset in the variation and you will get the offset so long as the rental property meets the criteria for NRAS. HOWEVER it can be more than a little dangerous to claim the full amount if it is the first year as it will be apportioned on the amount of time it was rented, or if you have a significant period of not being rented out you will also not meet the NRAS criteria for that period (on my understanding) and hence the offset will be apportioned. I am by no means an expert on NRAS however it would be foolish to claim the whole lot back in the first year as it would be apportioned, and also you have no idea if it will not be rented for a significant amount of time (although probably pretty minor issue in this rental market).

Practically, apportion it based on time you think it will be eligible for NRAS in that year and deduct a little more just to be safe. Also the variation will include things like depreciation and building allowance so nice to get an idea of this also prior to lodgement of the variation.

A bit of info on NRAS is here...

http://www.environment.gov.au/housing/nras/investors.html