Nras

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The National Rental Affordability Scheme in Queensland’s numbers have been revealed, with the 7,000 mark being passed across the state – of which, 5,000 of the NRAS dwellings have been delivered since March 2012.
Minister for Housing and Public Works Tim Mander said that 80% of NRAS in Brisbane has been delivered in the past two years.
“This fills a crucial gap in the housing system for people on modest incomes who could otherwise be waiting years for social housing,” he said.
“Of the 9,000 or so Queensland households who have found a home under this scheme, almost 30 per cent were previously on the social housing waiting list.”
He noted that there were 30,000 on this waiting list, and that this not only helps provide shelter, but also construction jobs.
“Between March 2012 and September 2013, NRAS was responsible for almost 10 per cent of all new dwellings built across the state so you’re not only getting a great social outcome but a great economic one as well,” he said.
The number of dwellings delivered in different areas:
Brisbane – 1,200 dwellings
Townsville – 609 dwellings
Gold Coast – 949 dwellings
Sunshine Coast – 485 dwellings
Ipswich – 738 dwellings
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jduke-EHk3XBmHkn

NRAS responsible for 10% of Queensland dwellings built from March 2012 to September 2013

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The fifth round of the National Rental Affordability Scheme (NRAS) will not proceed, following a 2014 budget announcement.
It was mooted in pre-budget leaks after the latest round of NRAS applications, round five, had been put on ice.
NRAS, which brings new rentals 20% below market into existence through incentives to developers and investors, has been under fire.
Property Observer has previously explored <a href="/expert-insights/29475-nras-should-it-be-scrapped" target="_blank">whether the scheme ought be scrapped</a>. <a href="https://www.urban.com.au/expert-insights/29475-nras-should-it-be-scrapped" target="_blank"> </a>
Sarah Toohey, the affordable housing advocate, tweeted the news of NRAS not proceeding to its fifth round, along with the Community Housing Federation of Australia.
<img src="/images/2014/05/14/tweet-may-14-one.jpg" alt="">
The budget papers suggest the saving by not proceeding with round five will be $235 million over three years.
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jchancellor-FAypfDUnLy

National Rental Affordability Scheme (NRAS) fifth round will not proceed: 2014 budget

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News that the Abbott government will abandon the fifth tranche of the National Rental Affordability Scheme (NRAS) has brought mixed reactions from the housing industry.
The scheme provides tax free incentives to developers and investors providing approved housing to the rental market at 20% below market value. According to the government, there are no current funds allocated for any future rounds of NRAS, with all money that was allocated to the fifth round returned to the budget and redistributed elsewhere. The <a href="/expert-insights/31232-national-rental-affordability-scheme-fifth-round-will-not-proceed" target="_blank">2014 budget papers suggest</a> scrapping the scheme will result in savings of $235 million over three years, and will reportedly could contribute $1 billion to revenue savings over the program's life.
Developers who have already received NRAS approval for their projects will continue to receive payments for up to ten years so long as their eligibility requirements are met and their constructions proceed according to the pre-arranged timelines. 
However, the Department of Social Services will be withdrawing financial support for projects where “insufficient progress” has been made in the dwellings’ construction. Investors are still able to invest in NRAS properties, as some 18,000 dwellings are still to be delivered. This yet to be completed apartment in Sydney’s Harris Park is currently advertised by Onyx (pictured below), a property investment advice company that markets NRAS approved dwellings.
<img src="/images/2014/05/14/NRAS%20ad.JPG" alt="">
Investors who own completed NRAS approved properties will this year receive $10,661 from the government. All applications for NRAS’s fifth round of approvals, which closed in August last year, have been abandoned and will not be approved.
The Housing Industry Association (HIA) has described the abandonment the final round of the National Rental Affordability Scheme as disappointing.
"The scheme has resulted in thousands of affordable homes for low and moderate income households, increased Australia’s housing stock and generated countless jobs the process,” said Graham Wolfe, the HIA chief executive. 
Prior to the budget announcements, HIA's chief economist Harley Dale told the Financial Review that the scheme had delivered affordable housing for thousands of Australians. “It’s been a good scheme that has helped boost low-cost rental accommodation, and we would like to see it continue,” he said.
The Urban Development Institute of Australia (UDIA) described the move as a “major disappointment.” “Since its establishment in 2008, NRAS has delivered 14,575 new homes for low and moderate income households, and was on track to provide 23,884 more,” said UDIA’s national president Cameron Shephard.
However, the Real Estate Institute of Australia has welcomed the Abbott lead government’s decision, with president Peter Bushby calling the action “one REIA supports”. 
In February, SQM Research managing director Louis Christopher told Property Observer while the scheme needed to be adjusted to keep out "dodgy developers" and improve transparency, "the NRAS is a good idea, and we’re supporters of it."
The NRAS was launched by the Labor government in 2008 as a partnership between the Commonwealth and state and territory governments.
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jrichardson-uRX5hFdKfN

No future for NRAS as fifth round is scrapped in 2014 budget

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The National Rental Affordability Scheme (NRAS) has been debated heavily in recent weeks and the federal budget will be heavily scrutinised to see what changes, if any, will be made.
However, Property Asset Planning’s managing director Brian Chant said that he was in support of the Property Council of Australia’s executive director of the residential development council, Nick Proud, for the federal government to continue their support of the scheme.
Chant, it is noted, has sold hundreds of NRAS properties in South Australia under the name NRAS4SA.
“In South Australia we have seen little evidence of problems with NRAS which have been recently reported in The Australian newspaper and other national media,” said Chant.
YOU MIGHT ALSO WANT TO READ: <a href="/expert-insights/29475-nras-should-it-be-scrapped" target="_blank">Scrapping NRAS: Should the affordability scheme continue?</a>
Chant noted that the criticisms, which suggested that international students were benefiting from NRAS, was not an issue in South Australia.
“To suggest that the program should be wound up is short sighted and misguided. Australians consistently nominate housing affordability and supply as a top five issue and this is the one Federal Government program that aims to address Australia’s housing shortage,” he said.
“Given the success I have seen from the point of view of both investors and a tenant I see no reason to scrap NRAS now. Yes there are a few areas that need to be tightened up but lets not start from scratch with a new program to address an urgent problem.”
“Combining changes to negative gearing with a reinvigorated NRAS program will, based on our experience in South Australia, make a huge difference and very quickly,” Chant said.
Green Building Council of Australia chief operating officer <a href="%20http:/www.propertyobserver.com.au/forward-planning/investment-strategy/politics-and-policy/29381-despite-nras-criticism-government-should-commit-to-scheme-gbca" target="_blank">Robin Mellon also agreed with the Proud’s comments</a>.
He pointed to recent comments from Proud that claimed ditching NRAS would be throwing the baby out with the bathwater.
“Increasing housing affordability in Australia requires a range of complementary measures, together with commitment from industry and all levels of government. NRAS is a vital piece of the jigsaw – one that we can't afford to lose,” Mellon said.
An academic from a research hub has <a href="/expert-insights/investing/30340-nras-fears-are-misplaced-politics-policy" target="_blank">also said that NRAS fears are misplaced</a>.
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Property Asset Planning supports call for federal government to continue NRAS

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The National Rental Affordability Scheme (NRAS), which brings new rentals 20% below market rent into existence through incentives to developers, has come under fire over the past week.
Just today, it has been announced that 20 new townhouses are available under NRAS in Redcliffe, with the Minister for Housing and Public Works Tim Mander noting that it's families who are their target.
“The development on John Street includes 28 townhouses, with 20 of those to be offered under the NRAS initiative," said Mander.
“I would like to congratulate Aspire Housing Group and Zest Homes for delivering a quality development that will go a long way to helping people find an affordable place to live.”
They have recently past the 7,000 mark for NRAS dwellings built in Queensland.
“NRAS is important because it increases the supply of new affordable rental housing, and also provides a real alternative to social housing for low to moderate income households," he said.
Property Observer has previously <a href="https://www.urban.com.au/expert-insights/29475-nras-should-it-be-scrapped" target="_blank">explored whether the scheme deserves to be scrapped</a>, however its future is still uncertain.
The $4.5 billion project is said to be all but dead by The Australian, who noted that senior government sources had told them that it will face a ‘revamp’ to deliver savings in the budget. This comes after the current round of NRAS applications, round five, has been put on ice, which they reported saw applications for the 80,000 incentives halted.
There have been numerous concerns over the scheme, one of which has been the trading of NRAS entitlements, which has been referred on to ASIC. Another has been the number of ‘wealthy’ international students apparently living in this accommodation. The Australian pointed to commonwealth figures suggesting that of 19,000 tenants of the NRAS scheme, 1,500 are international students.
However, this point in particular has been heavily contested by The Fifth Estate columnist Willow Aliento investigation who believes they’ve run their numbers incorrectly – mistaking 19,000 ‘incentives’ for 19,000 ‘tenants’. The Fifth Estate also reports that the Greens’ Senator Scott Ludlam, who said that NRAS works but that they need more, with super funds and institutional investors not touching the scheme.
At the end of the day, even for individual investors there are significant pros and cons to the scheme that <a href="/expert-insights/investing/19462-spare-observer-nras-properties-worth-" target="_blank">have had some commentators asking for an open mind to be kept</a>, and others, notoriously, saying they’d <a href="https://www.urban.com.au/news/25963-sept-5-flicker-3-todd-hunter-" target="_blank">rather stick a fork in their eye than buy it</a>.
Readers, what do you think:
{module Is this the end of NRAS?}
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Is this the end of NRAS? Frozen fifth round of applications

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GUEST OBSERVATION
The National Rental Affordability Scheme (NRAS) looks set for a major shakeup by the government, following suggestions it has been <a href="https://www.theaustralian.com.au/national-affairs/rudds-housing-gift-to-students/story-fn59niix-1226843122005" target="_blank">hijacked by universities</a> to develop subsidised studio apartments for wealthy international students, and that foreign investors, brokers and small time investors are <a href="https://www.theaustralian.com.au/higher-education/top-end-of-town-rorted-nras-scheme/story-e6frgcjx-1226855021305" target="_blank">exploiting</a> NRAS tax breaks.
It is true that about 20% of dwellings approved for NRAS subsidies are student accommodation. About 25% of these (5% of all the housing produced, or around 1000 dwellings) are apparently let to foreign students. Whether they are indeed wealthy is another question, though it’s clear some fine tuning of NRAS eligibility might be warranted.
At the same time, it could equally be argued that the increased supply of subsidised units in high rent areas around universities will create some downward pressure on rents to the benefit of all tenants in the area.
Indeed, even if some units are rented to people outside the initial target group, by far the more important concern should be the failure of the scheme to achieve anything like its supply target.
Failing to meet targets
To make a real difference for low income renters in major cities, NRAS needs to impact market rents by providing a genuine alternative at the local level. But against an initial target of 50,000 dwellings, more than six years in NRAS has stimulated construction of only about 20,000 new rental properties nationally. At this scale the supply effect of the scheme is minimal. So we are effectively left with another form of welfare housing – albeit for working households – which also means an emphasis on eligibility and targeting, and thus the worry about overseas students.
For more than 20 years governments in Australia have tried to attract private investors in ways that are sometimes creative, and sometimes crude. Examples include public-private toll roads, or the sell-off of once public assets like Qantas. Reducing public debt, increasing efficiency, improved choice for consumers and increased accountability are among the reasons given.
But there are two sides to this ledger, and recruiting market operators to deliver policy objectives carries inevitable costs. This might be in the form and distribution of services, the final cost to consumers, and the ethical behaviour of self-interested investors and providers.
Australia’s skewed housing market
NRAS was designed to induce private investors into providing affordable rental housing. The cost of housing is not just a problem for lower income households unable to afford decent and secure accommodation. Unavailability of affordable housing, especially in Sydney, Melbourne, Brisbane and Perth, has much wider social, economic and environmental consequences.
Many lower paid workers are forced to choose between spending more than half their income on rent, or commuting long distances – if they are able to access work at all – and bearing the cost in time, money and family life. When unemployment or family breakdowns happen, the next step is often homelessness, which can so easily begin a cycle of social exclusion.
When the population is growing and there is undersupply of housing, rents rise to meet the repayment commitments of mortgage holders. These in turn are driven upwards by speculation. The same process adds to insecurity for tenants as landlords turn property over to realise their capital gains.
Of course negative gearing already allows investors to reduce the cost of housing investments. By offsetting interest payments, maintenance and other costs, investors reduce their taxable income. Despite plenty of opponents, governments have retained it for fear that investors will desert the rental property sector. But as its critics point out, negative gearing directs the biggest benefits to the most expensive properties and provides an incentive to upgrade property and charge more rent.
NRAS is also a tax benefit, but it provides a fixed rebate of around A$10,000 a year for ten years. Investors can claim the rebate so long as a property is rented through an approved non-profit housing manager at 20% below the market rate. Potential tenants are means tested. In this way NRAS sought to keep investors in the affordable sector for the longer term. If they sell early in order to realise capital gains then the benefit is lost. It also means that low income tenants are less exposed to unexpected rent rises and unscrupulous landlords.
Beware xenophobia
Concerns about international and small investors exploiting NRAS tax benefits appear to be misplaced if not simply mischievous. The main purpose of NRAS is to make affordable housing at least as attractive to investors as short term capital gains. It was intended to stimulate exactly the kind of activity that its critics describe. Indeed if it was really a “cash cow for canny investors” then a lot more new housing might have been built.
Pointing to international investors and students as somehow ripping off Australian taxpayers through NRAS plays directly into xenophobic fears about Asian interest in Australian property. The question must be asked: is a locally based speculator with an interest in short term capital gains preferable to an international investor committed to providing affordable rental housing in Australia for at least ten years?
In his review Housing Minister Kevin Andrews should carefully consider whether NRAS should be allowed to fulfil its aim of creating a viable long term investment option in affordable rental housing.
Should it be expanded so that it puts downward pressure on rents in our major cities, or should it be reduced to another welfare housing program?
If the government prefers closely targeted housing then a market/private sector driven scheme is surely not the way to go, while if private investment is to power the housing system then we have to accept that the property investment market is now a global one.
Michael Darcy is director of Urban Research Centre at University of Western Sydney.
Michael Darcy receives funding from Pacific Link Housing; and the Australian Research Council. He is a former Board member of NSW Shelter and has had a research partnership with the Tenants Union of NSW. He is a member of the ALP.
This article was originally published on <a href="https://theconversation.com" target="_blank">The Conversation</a>. 
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jake-cSmGT7VXVf

NRAS fears are misplaced

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So the talk is that NRAS might be stopped in the upcoming May Federal Budget.
For mine, this is one government scheme that really works for the building industry and low-income households.
We have worked on several NRAS-based new projects.
I support the media blast by Metro and the UDIA.
Read on to see what we wrote about NRAS back in 2011.
To my surprise, very few investors (and sadly fewer property gate-keepers) know about NRAS.  And if they know something about it, then they are dismissive of it.  And mostly – I feel – out of fear and/or ignorance.
Yes, like most government schemes, what NRAS is and its merits, have been poorly communicated.  And in some instances, its application further entrenches its incorrect “welfare housing” persona.  But overall, it is a great scheme and too few investors (and developers) are taking the $10,000 annual rental subsidy seriously.
<blockquote>
For mine, NRAS is one government scheme that really works for the building industry and low-income households.
</blockquote>
So what exactly is NRAS?
The National Rental Affordability Scheme (NRAS) is a federal government initiative designed to tackle the issue of affordable housing.
NRAS is not a public or social housing programme, but rather a tax incentive to provide quality housing at below market rental rates.
Run in conjunction with state governments, NRAS aims to induce more investment in the lower price range of the residential construction and rental market by offering inducements to investors who participate in the scheme.
NRAS offers property investors a tax-free incentive for each property while participating in the scheme for a maximum of 10 years.
Currently, this incentive is $9,524 per year for every NRAS dwelling an investor owns, comprising a federal government contribution of $7,143 per dwelling, available as a refundable tax offset; plus a state or territory contribution of $2,381 per dwelling per year, as a cash payment or in-kind financial support.
In return, rents for NRAS dwellings must be charged at no more than 80% of the market rent valuation and there is to be a maximum of one rent increase for each dwelling each year.
In Queensland for example, the state government maintains a list of NRAS-approved tenants, who must meet strict eligibility requirements.
When a vacancy occurs, eligible rental applicants are referred to approved tenancy managers who manage NRAS properties on behalf of owners.
Standard residential tenancy laws apply to NRAS properties just as they do for any private residential investment.
In other words, the same rules regarding evictions, maintenance obligations and responsibilities of tenants apply to NRAS tenants as they do to other tenants in the private sector.
Rents are indexed annually in line with the percentage change in the rental CPI component, except in years four and seven when independent valuations are required.
And, importantly, investors may exit the scheme at any time with appropriate notice and without any financial penalties.
In general, NRAS projects are well-located in terms of jobs, amenities and public transport.  And in general, the design and quality of NRAS dwellings compares favourably with any private non-NRAS dwelling.
NRAS properties often co-exist within developments with other non-NRAS product.
Some of the points of difference that NRAS offers to property investors are:
<ul>
<li>All the benefits of a normal investment property with added annual tax-free government incentives</li>
</ul>
<ul>
<li>Investors can apply property expenses, non-cash deductions and allowances against a lower assessable rental income, increasing the gearing benefit</li>
</ul>
<ul>
<li>More than 1.5 million Australian households are eligible to rent NRAS properties, hence vacancy risk is negligible</li>
</ul>
<ul>
<li>Tenants are selected on their potential to be good tenants and their capacity to meet strict eligibility requirements</li>
</ul>
<ul>
<li>In many markets, NRAS properties often deliver a cash flow positive investment</li>
</ul>
<ul>
<li>Importantly, self-managed super funds can purchase</li>
</ul>
<ul>
<li>NRAS dwellings are private property – no government holds or caveats.</li>
</ul>
So here we have a scheme that shows many investment properties as cash-flow positive in the first year – and these are more often than not backed up by impressive (well by residential property standards) independent financial analysis.
What’s not to like here?  You are making money from day one; providing affordable rent for those that are finding it a bit hard; have a ten-year rental guarantee (assuming the government doesn’t water down or scrap the scheme); hassle free-management (on paper at least) and a box of chocolates from the government every year.
It appears to tick all the boxes.
Several of our developer clients inform us that their NRAS product is now the first to sell to investors.
Yet the banks are scared of it and will only finance 70% of the purchase price.  Some banks flatly refuse to be involved.  So, too, do too many solicitors, accountants, loan brokers and real estate agents.
True to form, valuers are discounting end prices by 20% – one assumes because the owner can only charge 80% of market rent and most valuers won’t include a subsidy when determining value, despite it coming from the government and being a 10-year programme.
Yes, NRAS is somewhat new; it hasn’t been that well communicated and it is a government-funded subsidy.  But welfare housing it isn’t and gone are the days where one’s residential investment strategy was as simple as “buy and forget”.
Our mindset is that property investors will need to look for every break they can get.
NRAS is a break worth considering.
Visit Michael's <a href="https://www.matusik.com.au/" target="_blank">website</a>, read <a href="https://www.matusikmissive.com.au/" target="_blank" rel="nofollow">his blog</a>, follow him on <a href="https://www.facebook.com/ThinkMatusik?fref=ts" target="_blank" rel="nofollow">Facebook</a> and <a href="https://www.twitter.com/michaelmatusik" target="_blank" rel="nofollow">Twitter</a>, or connect via <a href="https://www.linkedin.com/in/michaelmatusik" rel="nofollow">LinkedIn</a>.
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michaelmatusik-49YzLvdmNv

NRAS is an investment break worth considering

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GUEST OBSERVATION
No doubt this is one of the toughest federal government budgets we have seen in a long time. It would appear that the Liberal government have been true to their calling and were happy to make sacrifices across the economy in order to balance the books at some point in the future. 
But just how does this budget affect property investors?
Well it’s with relief that no changes have been made to capital gains tax, depreciation or negative gearing. Now, I'm not a fan of negative gearing all that often, the purpose of investing in anything is to achieve good growth and income for the future.
However, I do like the little incentive us property investors are given when it comes to the all to controversial depreciation. Absolutely I'm biased. I benefit from depreciation so I'm not going to argue it shouldn't be in place.
Ultimately, I think it is a great way for the everyday Australian without a business to take advantage of some form of taxation benefit that the big guys get all the time. Currently $6 billion dollars a year is lost in tax revenue due to negative gearing.
However there was one sector in the property industry that got dealt the wooden spoon, and that’s the NRAS scheme. <a href="https://www.urban.com.au/expert-insights/finance/30313-is-this-the-end-of-nras-frozen-fifth-round-of-applications%3Futm_source%3DProperty%2520Observer%2520List%26utm_campaign%3D79104ba176-17_April_2014%26utm_medium%3Demail%26utm_term%3D0_a523fbfccb-79104ba176-245297225&amp;sa=U&amp;ei=nI99U_qCEoWiugTn_oKQBQ&amp;ved=0CAYQFjAA&amp;client=internal-uds-cse&amp;usg=AFQjCNFdwiVJxYoXifPZ1D5eigkLdHrmJw" target="_blank">Round 5 of the National Rental Affordability Scheme will be frozen</a> pending a review. In my opinion this is a good move as it was lining the pockets of savvy developers and good property marketers while the everyday investor lined up to buy overpriced property to simply get some money from the government. Now I know there’s a lot more to it than that, however the scheme has been flawed in many ways. 
The property industries push for ASIC regulation of the industry is seemingly unlikely in the near future as large budget cuts to the ASIC budget are handed down forcing large scale job cuts within the organisation. It doesn't look promising that the team at ASIC will want to take on more work with less staff and money. 
Home owners or investors are generally a pretty small deal when it comes to federal budgets. It’s often the state budgets that can make big differences including stamp duty concessions and rates plus the ever tinkering of first home buyers grants. 
Outside of investing, first home buyers taking advantage of the Labor government's First Home Savers Account (FHSA) <a href="https://www.urban.com.au/expert-insights/finance/31308-first-home-savers-accounts-scrapped-what-now&amp;sa=U&amp;ei=2Y99U6XGOYy9uASq6ICYCQ&amp;ved=0CAYQFjAA&amp;client=internal-uds-cse&amp;usg=AFQjCNG_PqVeW7S8nl9lYGKuG4qUjQsiJw" target="_blank">will no longer be able to get tax breaks and co-contributions</a> as the scheme will be closed starting 1 July.
I think if anything, this budget should send a reminder to Australians of why investing in assets (not just property) is a necessity to gain financial freedom and retirement when you want it. With the pension age pushed out even further, serious holes in the future funding for pensioners, its clear we need to invest.
JOSH ATHERTON is managing director of <a href="https://www.linkedin.com/profile/view?id=123928559&amp;locale=en_US&amp;trk=tyah" target="_blank">Portfolio Property Investments</a>.
You can connect with Josh on <a href="https://www.linkedin.com/profile/view?id=123928559&amp;locale=en_US&amp;trk=tyah" target="_blank">LinkedIn</a>.
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jatherton-AZUXX8vQA7

How does the budget affect property investors?

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GUEST OBSERVATION
My most read and commented on blog was <a href="https://www.urban.com.au/news/25963-sept-5-flicker-3-todd-hunter-&amp;sa=U&amp;ei=7FMrVdjsLILksAXor4DgBQ&amp;ved=0CAQQFjAA&amp;client=internal-uds-cse&amp;usg=AFQjCNGqLbshlgPB4R7fTCAJq4VGF2NneA" target="_blank">my thoughts on the NRAS “scheme</a>”.
Well, I can say I was right and the story of this “scheme” only gets worse I’m afraid.
Earlier this year I had a client call me and let me know her NRAS property in Sydney that she purchased through another property company had been trashed. She only found this out after not receiving rent for two months. This sparked her to inspect the house to find they had fled the house and left it damaged along with rubbish everywhere.
When she investigated it further, she found that four bedroom house had eight people living in the house. The lease agreement was only approved as having four people living there. The consortium managing the property had not done any of the required property inspections, like they had said they would do.
And funny enough, they now don’t return her phone calls.
So after spending several thousands of dollars in repairing and cleaning the house, they thought they may want to sell it. The bad experience had put a foul taste in their mouth. I offered to refer her to a friend who is an agent, who works in the area and they have done an inspection. Now the fun begins…
The agent gave them what they believed to be fair market value price in a strong Sydney market and this dollar figure was still $80,000 less than what they paid for the house.
So, now they have a house that has been trashed, now vacant and worth far less than what they paid for it.
Could it get any worse?
Yes it can.
Now I don’t know the reasons why, but it would appear that the government department responsible for NRAS has amalgamated with another government department and as a consequence many (and quite probably all) of the tax refunds for NRAS were not paid for the last financial year, due to a software glitch that they couldn’t repair.
These payments amount to close to $10,000 per annum that the investor is supposed to receive back in compensation for letting out their property 20% below market value.
To make it even better, they have no ETA on when the problem will be fixed, if at all.
This was money these investors could have really done with to help pay for the trashed and damaged property they have been left with.
So I am sorry, but have I missed the positives of NRAS?
TODD HUNTER is a buyer’s agent, director and location researcher for Sydney-based <a href="https://www.wheregroup.com.au/" target="_blank">wHeregroup</a>.
He reached a personal investment portfolio of 50 properties in 2006 and has also started building an SMSF portfolio.
This article was originally posted on <a href="https://www.wheregroup.com.au/blog/todd-hunter/" target="_blank">Todd's blog</a>.
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thunter-umjjMzoT8b

NRAS – you've got to be kidding me: Todd Hunter

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The Senate Affordable Housing committee report has noted the matter of the charitable status of community housing providers was needing resolution as a matter of concern.
In 2008, the Standing Committee on Community Affairs inquired into legislation providing for regulations to prescribe NRAS with witnesses representing the community housing sector saying that their biggest concern around their participation in NRAS was the possibility that such engagement would compromise their charitable or public benevolent institutions (PBI) status. 
At that time, a position taken by the Australian Taxation Office (ATO) generated concern as the ATO indicated that any organisation with charitable status would seriously jeopardise that status if they participated in NRAS.
They further indicated that organisations such as consortiums that participate in NRAS will not be endorsed as charitable organisations.
Furthermore—one that sent chills down the spine of the sector—participation in NRAS may have caused the ATO to heavily scrutinise all of the activities of a participating not-for-profit organisation, not just those that pertain to participating in NRAS.
The ATO reasoned that NRAS was intended to assist not only low income earners, but people on moderate incomes. 
The then government took measures to provide assurances that participating in NRAS would not jeopardise the status of not-for-profit organisations as charities.
Even so, concerns persist that charitable organisations could risk their charitable status by participating in NRAS.
According to the Community Housing Federation of Australia, a charitable tax status allows providers access to a range of tax concessions, including exemption from income tax and GST, access to the Fringe Benefits Tax and often local government concessions on rates and utility bills.
It argued that the charitable tax status was an essential component of the community housing model because the concessions lowered their operating, construction and development costs. 
The Federation told the Senate committee that these concessions, however, were contingent on a community housing provider satisfying the ATO that its organisation's purpose met the criteria for charitable status.
Despite measures taken since 2008 to preserve the status of NFP community housing providers as charitable institutions, the Federation explained over the last several years the sector has operated under the threat and uncertainty that many of its activities, especially in the delivery of affordable housing, would not be considered to have met the criteria of the relief of poverty and could jeopardise the charitable status of community housing providers. 
The legislation that was purported to constrain housing activities through a narrow interpretation of permissible activities was withdrawn.
However, other legislation passed in June 2013 contained some tax conditions that may have a similar impact on providers' charitable status, resulting in limiting their participation in the affordable housing market for fear of putting their charitable tax status at risk. 
Other legislation, such as the new definition of charity that went into effect 1 January 2014 provided some clarity on the situation...[but it] has been mooted for repeal leaving the sector back in the position it was before with ambiguous interpretations of housing activities allowable as a charitable organisation.
The Community Housing Federation drew attention to 'the unsettling environment in the charities and tax arena' which would 'cause continuing uncertainty for the sector for forward planning in the affordable housing market'. 
The Senate committee was firmly of the view that the Australian Government must take steps to provide certainty for community housing providers engaged in NRAS or similar schemes designed to provide affordable housing that their charitable status is not in jeopardy by participating in such schemes.
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