National Rental Affordability Scheme

The National Rental Affordability Scheme (NRAS) is an Australian Government initiative that aims to increase the supply of reduced cost rental housing for low and moderate income individuals and families across Australia. The Scheme involves the allocation of a National Rental Incentive to participating organisations, to encourage large-scale investment in and innovative delivery of affordable housing.

National Rental Incentive

The NRAS offers an annual National Rental Incentive for new rental dwellings approved under the Scheme, which comprises of:

• a Commonwealth contribution in the form of a refundable tax offset to the value of $6,504 per dwelling per year for 10 years.  Not-for-profit organisations endorsed as charities by the Australian Taxation Office will receive the contribution in the form of a payment
• a State or Territory contribution to the value of $2,168 per dwelling per year for ten years in the form of a payment or in-kind support.

To be eligible to receive the Incentive, dwellings must meet mandatory requirements and applications must address five assessment criteria.  The Australian Government's NRAS website has detailed information on these requirements.

Victorian Government participation

The Victorian State Government committed to the Establishment Phase of the Scheme in 2008. Under this Phase, the Australian and Victorian Governments have committed significant resources to support over 3,000 dwellings in Victoria. Details of the approved organisations and dwelling locations and availability can be viewed below.

The Victorian Government contribution will be made as a tax free cash payment and will be indexed in line with the rental component of the Consumer Price Index, effective 1st July each year, with 2008-09 being the base year. For 2008/09 the Victorian Government contribution was $2,000 for each individual dwelling. For the 2009/10 financial year the State contribution will be $2,168 per dwelling.

Legislation and Regulations

The Commonwealth National Rental Affordability Scheme Act 2008, the National Rental Affordability Scheme (Consequential Amendments) Act 2008 and the National Rental Affordability Scheme Regulations support the Scheme. Organisations considering applying for the Scheme should refer to the Act and Regulations to ensure compliance.

Mandatory Requirements

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

Mandatory requirements include:

1. Dwellings will be rented to 'eligible tenants'
2. Dwellings will be rented at a rate that is at least 20 per cent below the market rate
3. 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
   4. Dwellings will comply with State, Territory and Local Government planning and building codes and requirements.

Organisations considering applying for NRAS incentives should refer to the NRAS Guidelines and specific Round Application Guidelines available at the Australian Government website to determine their eligibility for the Scheme.

Small-Scale or Private Investors

As the NRAS aims to encourage large-scale investment in affordable housing, it is not directly available to small-scale, private, individual investors in the rental property market unless they participate as part of a non entity or other joint venture arrangement. These investors could also become involved by investing in entities that participate directly in the Scheme, for example, through a superannuation fund or property trust.

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 or Victorian Governments.

Where dwellings are approved under the NRAS, investors should be aware that this does not mean that the Australian or Victorian Governments endorses, guarantees or secures the investment in any way. Investors and approved participants should also be aware that provision of the Incentive is dependent on satisfactory completion of all conditions and compliance requirements under the Scheme.

Investors should undertake their own investigations and seek appropriate independent investment advice to ensure they are satisfied that investing in an NRAS dwelling is the right investment for their individual circumstances.

Round 3

On 12 August 2009, the Federal Minister for Housing, the Hon Tanya Plibersek MP, announced that Round Three of the National Rental Affordability Scheme will open from 1 September 2009.

The Third Round comprises of three separate calls for applications:

1. Applications which link to proposals under the Social Housing Initiative, a component of the Nation Building and Economic Stimulus Plan or
2. Applications which involve the development of state-owned land that has been released, or will be released, for residential development or
3. Applications for 1000 + dwellings.

The Call for applications opened on 1 September 2009 and will remain open for up to 12 months.

Categories 1 and 2

The first two categories are a targeted approach that aims to simplify and encourage mixed developments on public land and to support linkages with the Social Housing Initiative, which is part of the National Building Economic Stimulus Plan.

Successful applicants under the Nation Building Economic Stimulus Plan will be contacted directly to discuss opportunities for submitting a proposal under this category. If you believe you are eligible to apply under this category and have not been contacted, please email nras@dhs.vic.gov.au.

Victoria does not currently have any land that is being considered for public release under category 2. Future opportunities that arise under this category will be advertised on this website.

Category 3 (1000+)

Category 3 seeks to encourage large scale investment into affordable housing, and seeks proposals of a minimum 1000 dwellings. Organisations seeking to apply under this category must register for an application pack at the Australian Government’s NRAS website. Applications must be lodged with the Australian Government and will be jointly assessed by the Australian Government and the relevant State or Territory.

Victorian Government NRAS priorities

The Victorian Government developed a set of Principles (the Principles) to guide the allocation of NRAS funding in Victoria for Round 3.

Applicants are required to detail how their proposal is compatible with the Principles as part of their application.

The Principles also indicate that projects involving not-for-profit rental housing agencies in the delivery of NRAS projects will be preferred. View a list of agencies currently registered with the Victorian Office of the Registrar.

Establishment Phase outcomes

In the Establishment Phase of the Scheme (Rounds 1 and 2), 10,562 incentives have been allocated nationally. 3,023 of these incentives have been allocated to organisations that will deliver dwellings in Victoria.

A list of organisations supported in Victoria is detailed below.  Dwellings will be progressively delivered until June 2012.

Application for tenancy

The Victorian Government does not select tenants or maintain a waiting list for homes supported by NRAS. This is done by the tenancy manager of the particular property. Tenants need to contact the tenancy manager directly to register their interest. In some instances, the organisation will appoint the tenancy manager once the dwellings are built.

The allocation of NRAS dwellings to tenants is assessed by, and at the discretion of, the tenancy management organisation. As long as NRAS eligibility requirements are met, decisions will be made in line with their usual policies and processes. Please note that as there is considerable demand for these dwellings there is no guarantee that all interested persons will be able to rent a dwelling developed under the Scheme.

Fact Sheet

A NRAS fact sheet has been prepared by the Victorian Office of Housing to provide an overview of the Scheme and to respond to frequently asked questions including:

• who can apply under the Scheme
• what size should the projects be and where should they be located
• who owns and manages the properties
• who will be able to live in the home, and how do they access them
• how is the rent set

Find out more

The Application Process page has further information on:

• Scheme Guidelines and application process
• Calls for Applications 
• Victorian Government Guidelines for Preparing an Application

A list of Frequently asked Questions and Answers are also available.