National Rental affordability Scheme
http://www.facsia.gov.au/internet/facsinternet.nsf/housing/nras_prospectus.htm
more details here;
I have simply just cut and paste important info;
But to sum up the government is going to ‘provide a substantial financial incentive of a minimum of $8,000 value per dwelling annually to investors who rent approved dwellings at 20 per cent or more below current market rates, to low and moderate income households.’
‘The National Rental Incentive is income tax-free, indexed to the rental component of the Consumer Price Index (CPI) and is complemented by existing taxation arrangements including depreciation’
‘Compliance with the Scheme will offer investors certainty of contributions from the Australian, State or Territory government in the form of the National Rental Incentive over a period of 10 years’
‘The Australian Government will allocate 50,000 incentives through the Scheme over four financial years. A further 50,000 incentives will be allocated from July 2012 if demand from investors and tenants remains strong. These incentives aim to stimulate the creation of a new ongoing asset class and a development industry specialising in affordable rental housing.’ A Snapshot of the Residential Property Market in Australia
‘Since 2004, demand for housing in Australia has outstripped supply. It is estimated that Australia currently has an annual housing supply deficit of up to 30,000 homes’
Investor EligibilityThe National Rental Affordability Scheme is targeting financial institutions with an interest in this new class of residential property investment. These institutions may include banks, superannuation funds (excluding self-managed superannuation funds), credit unions, property trusts listed on the ASX and unlisted property trusts.
Companies and not-for-profit organisations with relevant expertise in the property and/or tenancy management sectors may also apply for incentives under the Scheme.
Projects sponsored by a consortium of institutional and/or commercial investors and not-for-profit organisations are encouraged for the purposes of the Scheme.
The Scheme is not targeting small, individual investors, although they may invest in a participating investor, such as a property investment trust or a superannuation fund.
So how might this effect the market?? To me it looks like a lot of super funds will pull out of the stock exchange and move into property…Although I’m sure I read somewhere the houses had to be new homes just built….Hmm Scamp I’m interested in your opinion here, esp about the supply deficit of homes in Australia……
Hmmm, lets see. … There is currently a lack of builders so first they will have to bring skilled migrants to build all these extra new homes. The workers will have to be housed somewhere so that will put increased pressure on the available rentals and cause the rents to go up by 50% or more. Building costs will also go up and so house prices will follow soon. Then in 2 years they'll rent the new houses at a 20% discount and collect the gov. reward while the gov. will congratulate themselves for coming up with such a great scheme. During the next election the gov. will ask us to vote for them because they are the ones who helped to lower the housing costs for struggling families. Did I miss anything else ?
Sounds like a great idea.
What will be the impact to individual investors – like me (and you!).
On the surface of it, I probably would have participated in the NRAS as an investor. But, the Government only want to restrict this too larger financial institutions. Why???
As an "individual investor", why should I be excluded from such scheme? From the article extracts on the NRAS, individual investors can participate via accessing one of the major funds. Not sure I want to release "control" to one of the major institutions as I have limited confidence in them to manage my money in my best interests.
Anyhow, does anyone else have any insight or considered opinions as to what the fallout of this sheme may be to individual property intestors? There is always positives and negatives from change, so lets hear from both sides of the fence.
Just a question how do you find out CPI, or current market rental rates?
You must be logged in to reply to this topic. If you don't have an account, you can register here.
