“ It (NRAS) represents a new investment opportunity in the Australian market. More than 1.5 million households will be eli...
NRAS <ul><li>The National Rental Affordability Scheme </li></ul><ul><li>Using the QAHC Model </li></ul>A Summary Copyright...
NRAS What’s in it for you? <ul><li>A tax free incentive of $9,120 per dwelling each year for 10 years </li></ul><ul><li>An...
NRAS <ul><li>4 bed house & land  $400,000 </li></ul><ul><li>Market rent per week  $400  $20,800 </li></ul><ul><li>NRAS dis...
NRAS <ul><li>NRAS Incentive is indexed annually to the national rental component of CPI. Currently the rental index is run...
What’s the value of an NRAS certificate?
<ul><li>4 bed house & land  $400,000 </li></ul><ul><li>Market rent per week  $400  $20,800 </li></ul><ul><li>NRAS discount...
<ul><li>NRAS Income thresholds for eligible tenants  </li></ul>Parent/s with 3 children earning  $98k - $123k* Parent/s wi...
WHY QAHC ? <ul><li>The only guaranteed supplier of a TAX FREE incentive by agreement with the ATO </li></ul><ul><li>The on...
The QAHC has arranged Property Management Agreements that include ‘all in’ costs. There are no extra charges for things su...
<ul><li>The Property Manager must pay rent for the  first two weeks  of any vacancy that occurs after a NORMALLY occurring...
NRAS <ul><li>Long term tenancy agreements provide tenant & landlord security </li></ul><ul><li>Responsibilities of tenants...
NRAS <ul><li>The property can be sold to another investor with the balance of the 10 year lease in place </li></ul><ul><li...
For further details contact: David Hedley-Ward - 0406 011 123 or  Russell Dell - 0400 409 000 Copyright Queensland Propert...
NRAS disclaimer <ul><li>The information recorded in this document is provided on the basis that readers will be responsibl...
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NRAS Explained Jul 2010

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NRAS Explained Jul 2010

  1. 1. “ It (NRAS) represents a new investment opportunity in the Australian market. More than 1.5 million households will be eligible for tenancies under the Scheme - a large and diverse pool of potential tenants for investors in affordable housing.” The Hon. Wayne Swan (Treasurer) Copyright Queensland Property Investment © 2009
  2. 2. NRAS <ul><li>The National Rental Affordability Scheme </li></ul><ul><li>Using the QAHC Model </li></ul>A Summary Copyright Queensland Property Investment © 2009
  3. 3. NRAS What’s in it for you? <ul><li>A tax free incentive of $9,120 per dwelling each year for 10 years </li></ul><ul><li>An incentive paid to owners as a tax certificate at the end of each tax year </li></ul><ul><li>In exchange for the tax free incentives new houses are rented at a discount of 25% to market rent to eligible tenants - resulting in higher occupancy rates and longer leases </li></ul>Copyright Queensland Property Investment © 2009
  4. 4. NRAS <ul><li>4 bed house & land $400,000 </li></ul><ul><li>Market rent per week $400 $20,800 </li></ul><ul><li>NRAS discount 25% -$100 - $5,200 </li></ul><ul><li>Reduced rent per week $300 $15,600 </li></ul><ul><li>Tax free annual subsidy $9,120 </li></ul><ul><li>Gross cash per annum* $24,272 </li></ul>A typical NRAS enhanced property investment yield Copyright Queensland Property Investment © 2009 * (before allowing for normal operating expenses)
  5. 5. NRAS <ul><li>NRAS Incentive is indexed annually to the national rental component of CPI. Currently the rental index is running at between 6 & 12% per annum (8.4% on 08/09) </li></ul><ul><li>Rent incentive is indexed annually to the state rental component of CPI. Currently the rental index is running at between 6 & 12% per annum (10.2% on 08/09) </li></ul><ul><li>Market rents are subject to independent assessment in years 1,4 & 7 </li></ul><ul><li>Suitable stock can range from studio apartments at $200 pw to family housing at $400 pw </li></ul>The important numbers Copyright Queensland Property Investment © 2009
  6. 6. What’s the value of an NRAS certificate?
  7. 7. <ul><li>4 bed house & land $400,000 </li></ul><ul><li>Market rent per week $400 $20,800 </li></ul><ul><li>NRAS discount 25% -$100 - $5,200 </li></ul><ul><li>Reduced rent per week $300 $15,600 </li></ul><ul><li>Tax free annual subsidy $9,120 </li></ul><ul><li>At top rate of tax (46%) worth $16,890 </li></ul><ul><li>Effectively producing $32,490 </li></ul>A typical NRAS enhanced property investment yield now looks like this... Copyright Queensland Property Investment © 2009
  8. 8. <ul><li>NRAS Income thresholds for eligible tenants </li></ul>Parent/s with 3 children earning $98k - $123k* Parent/s with 2 children earning $85k - $106k* Parent/s with 1 child earning $71 - $89k* Singles with no children $41k - 52k* <ul><li>Income thresholds are indexed and can be exceeded by 25% for up to 2 years and still remain within NRAS tenancy eligibility criteria. </li></ul><ul><li>Normal tenancy pre-checks are required & income levels do not guarantee eligibility. </li></ul><ul><li>Groups particularly targeted are community ‘essential’ persons such as policemen, firemen, teachers & nurses </li></ul>Copyright Queensland Property Investment © 2009
  9. 9. WHY QAHC ? <ul><li>The only guaranteed supplier of a TAX FREE incentive by agreement with the ATO </li></ul><ul><li>The only not-for-profit organisation working under the NRAS banner (versus fund management structures) </li></ul><ul><li>Provides a fully comprehensive property management model </li></ul>Copyright Queensland Property Investment © 2009
  10. 10. The QAHC has arranged Property Management Agreements that include ‘all in’ costs. There are no extra charges for things such as <ul><li>Annual Rental Increments </li></ul><ul><li>Letting Fees </li></ul><ul><li>Re-letting Fees </li></ul><ul><li>Advertising </li></ul><ul><li>Administration etc. </li></ul>Copyright Queensland Property Investment © 2009
  11. 11. <ul><li>The Property Manager must pay rent for the first two weeks of any vacancy that occurs after a NORMALLY occurring end of lease situation. Abnormal vacancies are covered for up to 15 weeks under the extended insurance Policy put in place by the QAHC – another significant benefit they offer. </li></ul>Copyright Queensland Property Investment © 2009 RENTAL SECURITY
  12. 12. NRAS <ul><li>Long term tenancy agreements provide tenant & landlord security </li></ul><ul><li>Responsibilities of tenants improved through fear of losing NRAS discounted rent ($5000 reasons to pay rent on time and look after the place) </li></ul><ul><li>There is NO variation of discernible quality of housing within estate </li></ul><ul><li>NRAS housing is randomly distributed through estates generally at a maximum take up of 30% </li></ul>Offering peace of mind to owners Copyright Queensland Property Investment © 2009
  13. 13. NRAS <ul><li>The property can be sold to another investor with the balance of the 10 year lease in place </li></ul><ul><li>The property can be sold to an owner/occupier, however the NRAS certificate would be lost </li></ul><ul><li>The NRAS certificate can be transferred to another property that fits the criteria in the immediate vicinity. </li></ul>What happens if I want to sell the property? Copyright Queensland Property Investment © 2009
  14. 14. For further details contact: David Hedley-Ward - 0406 011 123 or Russell Dell - 0400 409 000 Copyright Queensland Property Investment © 2009
  15. 15. NRAS disclaimer <ul><li>The information recorded in this document is provided on the basis that readers will be responsible for making their own assessment of the information and are advised to verify all relevant representations, statements and information. No liability (in contract, tort or otherwise) will be accepted for any loss or damage incurred as a result of reliance upon any material contained in this publication, or for any information or advice provided in this publication or incorporated into it. Remax Property Associates nor its representatives are permitted by law to offer you financial (including tax) advice nor make recommendations. </li></ul>Copyright Queensland Property Investment © 2009

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