First round offers for National Rental Affordability Scheme

The Australian Government is offering incentives to build up to 4,000 new affordable rental properties across the country in the first round of the National Rental Affordability Scheme (NRAS).

This Scheme 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.

The National Rental Affordability Scheme will help build up to 50,000 new rental properties across Australia by 2012, which will then be rented out at 20 per cent below market rate.

Letters of offer for 2,800 incentives will be sent to 31 successful applicants starting from today. Offers for a further 1,162 incentives should be made in coming weeks, pending final approval.

“The Government knows it’s a tight rental market at the moment and the National Rental Affordability Scheme will help increase the supply of affordable housing and reduce rental costs for low and moderate income households,” , Tanya Plibersek said.

“Today we are offering incentives to applicants planning to build a range of different homes – apartments, townhouses and houses – to ensure we cater to the accommodation needs of families, seniors and other households.

“Properties will be rented out at 20 per cent below market rate and 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. We’re expecting to see the first families moving into NRAS homes in coming weeks.”

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.

These offers, if accepted, will provide further stimulus to the housing construction industry. Industry experts say these current offers could create more than 7,000 jobs in the housing construction sector.