The Australian Government’s National Rental Affordability Scheme (also known as “NRAS” or “the Scheme”), which is implemented in collaboration with state and territorial governments, promotes affordable housing. Housing affordability is a significant community concern, which has been acknowledged by governments, the business sector, and community organizations.

How NRAS works

The NRAS is an Australian programme that lowers rental prices for households with low to moderate incomes and expands the supply of affordable rental homes by providing financial incentives to housing providers to considerably lower their rent.

Affordable housing is typically handled by non-profit community housing providers and comprises a variety of housing styles and sizes, from single units to homes and flats.

Although most persons who qualify for social housing also qualify for NRAS, affordable housing is not the same as social housing. The maximum level of income required to qualify for NRAS is higher than the minimum required for social housing since it is intended to support persons who are going through a change in their lives, such as leaving home, having a baby, or getting divorced.

There are two ways to calculate rental fees under the NRAS:

• Reduced rent. Rent under the NRAS is often 20–25% less than the market rate, which is calculated by indexing the property against comparable properties in the neighbourhood.

• The percentage of income. The second method of calculating rent is based on a person’s pre-tax income as a percentage. With this type of rent structure, households might anticipate paying 25–30% of their income before taxes for rent.

Legislation, Regulations and Guidelines

The legislative framework for the Scheme is provided through the National Rental Affordability Scheme Act 2008; the Income Tax Assessment Act 1997 and the NRAS Regulations.

The National Rental Affordability Scheme Policy Guidelines provide policy guidance on the administration of the National Rental Affordability Scheme within the legislative and regulatory framework.

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