National Rental Affordability Scheme passes Australian Parliament
The Australian Parliament tonight passed legislation to establish the Rudd Government’s National Rental Affordability Scheme (NRAS).
NRAS is a key component of the Rudd Government’s $3.7 billion housing package, which will boost rental stocks, help people save for their first home and lower housing infrastructure costs for some entry level housing.
NRAS will help build up to 50,000 new rental properties across Australia at a cost of $623 million in the first four years.
Under the scheme, the Australian Government has combined with State and Territory Governments to offer incentives to institutional investors and housing providers to build properties which will be rented out at 20 per cent below market rate.
“There is shortage of affordable housing in Australia and many families are doing it tough trying to make ends meet,” , Tanya Plibersek said.
“Rental vacancy rates are below two per cent in most capital cities and the Scheme will increase the supply of affordable housing and reduce rental costs for low and moderate income households.
“Paying the rent can be a daunting task for low and moderate income earners and the National Rental Affordability Scheme is one way the Rudd Government is trying to put downward pressure on prices in the current tight rental market.
“We’re expecting to be able to move the first families into NRAS homes in coming weeks.
“With properties to be rented out at 20 per cent below market rate, we’re keen to see low to moderate income workers such as those in childcare, retail and hospitality able to afford to live in areas where their skills are needed,” Ms Plibersek said.
The two key elements of the incentive are:
- an annual Commonwealth Government incentive of $6,000 for each dwelling in the form of a refundable tax offset or payment and;
- an annual State or Territory government incentive of $2,000 or more, for each dwelling, which will be provided through cash payments or in-kind financial support.
Up to 1.5 million households will be eligible to be tenants under the Scheme.
If market demand remains strong, another 50,000 incentives for a further 50,000 affordable rental dwellings will be made available over five years from July 2012.