Management and compliance of NRAS dwellings

NRAS Approved participants

Approved participants are usually:

• property developers
• not-for-profit organisations
• community housing providers.

Approved participants manage multiple properties, which may be located in different locations. NRAS dwellings range from studio apartments to family homes.

Approved participant’s responsibilities include:

• management of NRAS properties
• liaising with the Department of Social Services  
• ensuring compliance with the NRAS Act and the 2020 Regulations.

Approved participants can:

• contract a service provider (property or tenancy manager) to manage properties and tenancy arrangements. This can include collecting compliance information on their behalf
• undertake the tenancy management role themselves.

NRAS investors

NRAS investors are third parties that own the rental properties in the Scheme.

Approved participants manage the properties on behalf of the investors.

NRAS investors and approved participants generally have contractual arrangements in place. The approved participant manages compliance with the NRAS regulatory requirements. They must pass on all or part of the NRAS incentive to the NRAS investor as agreed upon in their contract.

The Australian Government confirmed, in the 2014-15 budget, there would be no further funding rounds for new allocations. The currently allocated dwellings, which are held by approved participants in the Scheme, will continue to receive incentives in line with NRAS regulations.

NRAS incentive

To be eligible to receive an NRAS incentive, approved participants must meet various legislative requirements. To make this easier for approved participants, the Department provides a summary checklist before  the annual lodgement of Statements of Compliance. Approved participants need to ensure for each NRAS dwelling:

• a Statement of Compliance is lodged within the required timeframe
• market rent valuations are lodged within the required timeframe
• rent charged is at least 20 per cent below the market value rent at all times
• rent increases meet state and territory legislative requirements
• tenant demographic assessments are completed
• assessment of vacancy days has been completed
• compliance with state, territory and local government planning and building laws.

For further information, refer to NRAS conditions of allocation.

The NRAS incentive is indexed each year in line with the rent component of the Housing Group consumer price index.

The key elements of the incentive are:

• A refundable tax offset or
• A cash payment for approved participants who are endorsed charities with the Australian Charities and Not-for-profits Commission
• State or territory governments may offer approved participants a contribution for each dwelling. This can be a cash payment up to a third of the Commonwealth incentive. It can also be a yearly direct or in-kind financial support.

Statement of Compliance

A statement of compliance (SoC) is:

• An approved participant demonstrating they manage an approved NRAS dwelling
• The dwelling must be covered by an allocation
• The approved participant must give a SoC for each approved dwelling covered by an allocation
• The SoC must be presented each NRAS year (1 May - 30 April) to receive an NRAS yearly incentive

A SoC must be submitted to the department by the 30 June after the end of the NRAS year. For example, for 2019-20 NRAS year, the SOC must be lodged by 30 June 2020 unless the Secretary has approved a later date, which must not be later than 30 September after the end of the NRAS year.

For further information, refer to:

• The Statement of Compliance Information Sheet,
• Sections 42 and 43 of the National Rental Affordability Scheme Regulations 2020 (the Regulations)

Tenant compliance

Dwellings must be rented to eligible tenants. The household income limits for eligible tenants are updated annually and available on the Department’s website. Initial tenant income levels are assessed against gross household income limits, based on household composition.

Assessment of household income is based on the gross household income for the 12 months prior to the day on which the household becomes NRAS tenants. All steps should be taken to accurately determine household income, for example, sighting the following documents:

• copies of payslips
• notices of assessment of annual income tax returns
• statements from superannuation funds
• statements from Centrelink
• statements from dividends or rents paid
• statements from parents to indicate the level of financial support provided.

Existing tenants will cease to be eligible if their household income exceeds the applicable household income by 25 per cent or more in two consecutive eligibility years.

For further information, refer to the Tenant Eligibility Information Sheet.

Rent compliance

Properties must be rented at a rate that is at least 20 per cent below the market value rent.

An independent written valuation of the market value rent is required for each dwelling when it first becomes available for rent under the Scheme on the fifth and eight anniversary of the allocations 10 year incentive period. Properties must be rented at a rate that is at least 20 per cent below the market value rent.

The rent charged can be adjusted provided the following requirements are met:

1. rent charged remains at all times 20 per cent below the market value rent
2. state and territory residential tenancy laws are complied with.

For further information, refer to the Maximum Permissible Rent Information Sheet.

Notices and disqualifying breach

Notice of disqualifying breach determination against National Rental Affordability Scheme (NRAS) approved participant McKenzie Bond Pty Ltd (McKenzie Bond)

Notice of serious breach determination against National Rental Affordability Scheme (NRAS) approved participant BRAL Investments Pty Ltd (BRAL)

NRAS performance reporting

The Department has prepared this report for the purpose of disseminating information on NRAS free of charge for the benefit of the public. It draws on information and data provided by a variety of individuals and organisations, including from Approved Participants of the NRAS.

NRAS performance reporting

This report is made available for general information, and is subject to regular revision and updates.

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Last updated: 4 November 2022 - 10:00am