The NRAS program (National Rental Affordability Scheme) is designed to stimulate the building of rental homes in growth areas to satisfy a high demand for reasonably priced rental property by middle income Australian families.
The National Rental Affordability Scheme (NRAS) is a long term commitment by the Australian Government
to invest in affordable rental housing. NRAS provides a National Rental Incentive to the business sector and community organisations to build and rent dwellings to eligible low and moderate income households at a rate that is at least 20 per cent below the prevailing market rate.
The income limits for NRAS tenants are intended to include key and essential service workers, for example, childcare workers, nurses, police officers and fire-fighters.
The 2016-17 income limits for a household which does not include a sole parent are:
- $48,527 for the first adult
- $18,564 for each additional adult
The income limits for a household which includes a sole parent are:
- $67,137 sole parent with one child
- $83,233 sole parent with two children
- $99,329 sole parent with three children
For Example: A couple with three children earning up to $109,264 per annum would be eligible to rent an NRAS home. In addition, NRAS allows for tenant salary increases of up to 25 per cent above the income limit thresholds which means, this family could earn up to $136,580 for two years before they become ineligible for the discounted rent.
Income limits are indexed in accordance with the NRAS tenant income index on 1 May each year, rounded to the next whole dollar. The NRAS tenant income index is the All Groups component of the Consumer Price Index.
Approximately 1.5 million Australians are eligible to be NRAS tenants.
NRAS Tenancy Applications
Q: How is the market rent value determined for rental accommodation?
The rental will vary according on the type of rental accommodation. The rent is set at a discount to market rates. Eligible tenants should not spend more than 30% of their income on rental expenses.
Q: What is the typical length of an NRAS tenant lease?
A: A 12-month lease is normally provided to the tenants using a (REI) Real Estate Institute standard lease that is applicable to the location of the NRAS property. REI leases are the standard leases that are utilised for all residential tenancies within Australia.
NRAS does not provide NRAS property tenants with any special rights over and above the relevant residential tenancy legislation in the State or Territory where the NRAS property is located.
Q: What are the income levels for NRAS tenants?
Income levels for eligible NRAS tenants are generous and accommodate a range of low to moderate income earners. The NRAS also allows for tenant salary increases of 25% above the income limits after the tenancy has begun.
For a comprehensive list of eligible income levels provided by the Government, visit the Government's SEWPaC
Q: How are NRAS tenants chosen?
A: Tenants for NRAS properties are selected by investors and their tenancy managers. Tenancy managers review tenancy applications and maintain waiting lists for NRAS homes, but importantly the final decision to choose a tenant is always made by the dwelling owner.
Q: Can NRAS tenants be evicted?
A: Yes, NRAS tenants are no different to any other tenant. All tenants are subject to the normal tenancy legislation in the respective States or Territories in which the dwelling is located. All of the same rights and obligations of the applicable tenancy laws are equally applicable to both the NRAS property landlord and the NRAS tenant. So to retain the NRAS discount to market rental, NRAS tenants will want to properly maintain the property.
Q: Where are the NRAS properties available to be leased?
A: NRAS properties are located in specific locations that have been shown to have an undersupply of affordable accommodation.Typically these areas are highly sought after, with very low vacancy rates.
As a requirement of the NRAS each of the locations are selected due to the availability of amenities including public transport, access to shops, schools and employment hubs.