National Rental Affordability Scheme

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The Government is offering a start up bonus for investment properties between August 2011 & January 2012 . This coupled with the $9500pa NRAS bonus & stock in quality areas makes investment property an attractive option.

Investment Properties for Sale

LJ Gilland Real Estate Pty Ltd work very closely with sales people who specialize in NRAS investment properties as well as investment coaches who can assist you to purchase an investment with an appropriate yield with your future financial plans taken into consideration.Please contact our office on 07 3263 6085 or if you are interested in purchasing any investment properties.

Remember – there are 12 months free landlord’s protection insurance when you purchase an investment property from the LJ Gilland Real Estate Pty Ltd.

National Rental Affordability Scheme Queensland

NATIONAL RENTAL AFFORDABILITY SCHEME (NRAS)What is the National Rental Affordability Scheme?

In the 2008 Commonwealth Budget, the Rudd Government delivered on its election commitment to create a National Rental Affordability Scheme (NRAS). This scheme is designed to attract private investors to assist to deliver up to 100,000 new homes by 2018.

The simple fact is that supply and demand have created a shortfall in housing in the Brisbane area and the State and Federal Government policy objective is to reduce the massive housing shortage and improve rental affordability.Therefore they have have devised a stimulus package that will work in the favour of private investors.

What are the main points?

  • The Commonweath and State Governments are offering a tax credit incentive of approximately $9120+ per year, per dwelling for 10 years.
  • A 10 year headlease offering a single point of contact for compliance, property management and payments.
  • No legal or other fees are attached to the use of the headlease
  • Rent and the government incentives will be indexed annually according to CPI
  • The owners benefit from a “secured income stream” through a unique mix of group insurance, self insurance and risk management through approved housing managers
  • The tenants benefit from paying approximately 75% of the market value of the property

What do we mean by “Affordable Housing”

For this project, affordable housing is defined as follows:

  • modest housing which meets reasonable community standards
  • in any form – units, townhouses, detached housing of varying sizes
  • well located in relation to amenities like transport, employment, shops and schools.

What is a Tax Credit?

The Commonwealth provides a $6,504 Refundable Tax Offset per approved dwelling per year for 10 years. This reduces your tax payable or can be received as a tax refund if you do not have sufficient tax payable. The State provides $2,168 per dwelling per year as ‘non-assessable, non exempt’ incentive for 10 years. These entitlements are indexed to the rental component of the Consumer Price Index annually.

Individuals, corporations and superannuation funds can be entitled to the Tax Incentive. The Australia Tax Office provides guidance on how the incentive can be distributed in unit trusts or other trust arrangements. Please follow the line to the ATO’s page to find out more abou the tax inentive. ‘National Rental Affordability Scheme – Refundable tax offset and other taxation issues‘.

Which tenants are eligible to rent these properties?

How can this realisitically benefit you?

For many PAYE and PAYG taxpayers their investment in one or two NRAS properties, with an interest only loan, is indeed actually or very nearly cash flow positive.

“Cash flow positive” in investment terms means that the combination of income (rents), depreciation and tax advantages, including the $8,600 tax credit received by the investor are greater than the cost of buying (interest on mortgage) and maintaining the investment.

The consortium is also offering a secured income stream. Owners of rented properties will know that vacancy risk cannot be insured. The insurance industry sees vacancy risk as a “normal commercial risk”.

However in order to provide a higher level of income security for NRAS owners the Consotium and AON have undertaken a full analysis of vacancy rish under NRAS and the consotium has adopted the following approach:

  • Insure against all the “bad” events that lead to vacancies (arrears, abandonment, tenant damange & lawful eviction). This holy leaves the normal vacancies to manage in order to protect income streams.
  • Understand demand. The Government has stated that 1.5 million Australian Households are eligible for NRAS and this represents the potential pool of applicants
  • Discounted rent means money in the tenants pocket, thus meaning a greater likelihood of care by tenants and greater reluctance to leave new, well located dwellings.
  • Select the right properties good locations for our NRAS submissions
  • Longer term tenancies . We are offering 5, 3 and 1 year leases with a housing management target focused on 3 and 5 year leases. This helps families to put down roots and minimises turn-over
  • Ensure Property Managers have a performance based approach to managing turn-over, including pre-allocation of stock.
  • Conditional Vacancy Cover. Property Managers will carry the risk and costs of a normal vacancy rate of up to two weeks in any individual tenancy period [1,3 or 5 years]. Please check the Head Lease and Property Management Agreement for the details of this coverage.
  • Limits to vacancy cover. This coverage will not be automatic where the owner requires a ‘restricted’ tenant group. E.g. Only Students or only the Aged etc or in cases of investment in particular locations that have distinct market conditions e.g. a Mining Town. These are normal commercial risks and reflect investment choices. In these cases the Consortium will negotiate individual arrangements with the owner
  • In the event that a non insurable event of repairs and maintenance occurs that is the Landlord’s responsibility, and these repairs & maintenance delay the re-letting of the property then the vacancy coverage will not come into effect until the repairs and maintenance work are complete.
  • Property Managers will be pro-active in ensuring owners are informed of changes to demand. Long term market conditions are a normal commercial risk.

How many NRAS properties are available?

The Federal Government plans to have 50,000 NRAS homes Australia-wide built by the end of 2012.

However the process of gaining approval for each home and the allocation of these to investors is time consuming and means that relatively few properties are currently available.

The properties are sold on a first come first service basis to investors with pre-approved finance or cash-funds. So if you are interested in purchasing an investment property the first step you need to take is to ensure that you are eligible for a pre-approved mortgage (if needed) as in most cases clients have had to move very quickly when a property is released for sale.

LJ Gilland Real Estate Pty Ltd are currently working with developers who either have NRAS approved properties ready to purchase or who are in the process of building properties in order to secure approval under the NRAS scheme.

If you are a developer or know of any developers who are currently building investment properties please by all means contact us and we will contact them directly to discuss how they can be involved.


If you are considering investing in a property as an alternative to shares or superannuation, then please consider the benefits of the NRAS program:

  • Quality properties in high demand investment areas (QLD, NSW, NT)
  • Tax credits
  • Secured income stream
  • Positive cash flow for many investors
  • Qualified tenants
  • Long term capital growth

These high quality brand new house and land packages are finished to exceptional standards and are selling fast to investors with the view of long term security, high rental yield and focus on capital growth.

*Important* Whilst every care is taken in the preparation of the information contained herein, L J Gilland Real Estate Pty Ltd will not be held liable for any errors in typing or information. All information is considered correct at the time of printing. Any interested parties should satisfy themselves in this respect.

Confidential Email:- The information in this message is intended for the recipient named on this email. If you are not that recipient, please do not read, copy, distribute or act upon the message as the information it contains may be privileged and confidential. If you have received this message in error, please notify us immediately by return email. Thank you for your co-operation.

We, at LJ Gilland Real Estate Pty Ltd, take our role as Real Estate Agents very seriously to provide objective, impartial, and unbiased opinions about the value of real property by providing assistance in those who own, manage, sell, & invest in real estate. When conducting a property appraisal, we consider a series of facts, statistics, & other information regarding specific properties; analyse this data; to develop an opinion of value. Each appraisal challenges our ability to put analytical skills into practice, exercise sound judgement, and communicate effectively. We very much appreciate this challenge.

Who can have their properties approved under the National Rental Affordability Scheme?

  • Owners of new houses
  • Developers
  • Purchasers of new houses

How do you get your investment property NRAS approved? We will assist you with the process, please call Carlos or Linda Debello (07) 3263 6085.


Previous Board Member of Singapore & Malaysian Business Associations, BA Modern Asian Studies (GU) majoring in Economics & Mandarin, Licensed Real Estate Agent since 1996. Member of REIQ. Firm Member of Leading Property Managers of Australia. Our expertise at LJ Gilland Real Estate is your peace of mind. Our reputation lies in high performance property sales, and we take great pride in our excellence in property and asset management as well as body corporate management. We find individual solutions to fit our Clients needs. Being property specific rather than area specific because confining ourselves to one area simply wouldn't be giving you what you need. Specialties International Business negotiations, bilingual, Appraising Queensland Based Properties, Contractual negotiations, Dedicated to Family & Business, hardworking & focused to get the best outcomes for each and every Client.
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