National Rental Affordability Scheme Prospectusadasound.com.au/wp-content/uploads/2010/12/nras_prospectus.pdf · 3 National Rental Affordability Scheme Prospectus 2: Benefits to Investors

National Rental Affordability Scheme Prospectus

Increasing the supply of affordable rental housing for Australians and their families.

© Commonwealth of Australia 2008 ISBN 978-1-921380-95-2.

This work is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may be reproduced by any process without prior written permission from the Commonwealth. Requests and enquiries concerning reproduction and rights should be addressed to:

Commonwealth Copyright Administration Attorney General’s Department Robert Garran Offices National Circuit CANBERRA ACT 2600

Or posted at: www.ag.gov.au/cca

Contents

Foreword 1

1: Introduction to the National Rental Affordability Scheme 2

2: Benefits to Investors 3

3: A Snapshot of the Residential Property Market in Australia 4

4: Investor Incentives 6

5: Investor Eligibility 6

6: Liquidity of Residential Rental Property in the Scheme 7

7: Assessing Rates of Return 7

8: Important Dates for Investors 9

9: Applying for the National Rental Affordability Scheme 12

10: Partnership Facilitators and the Interest Register 12

11: Contacting the National Rental Affordability Scheme 13

12: State and Territory Contacts 14

13: Glossary 14

14: Legal Disclaimer and Privacy Statement 15

Investment Scenario 1: Aged Accommodation Sector Project 5

Investment Scenario 2: Retail Investment 8

Investment Scenario 3: Not for Profit Housing Provider as Developer 11

Investment Scenario 4: Institutional Investment 13

i

1 National Rental Affordability Scheme Prospectus

Foreword

Dear Potential Applicant,

Thank you for your interest in affordable housing and the Australian Government's National Rental Affordability Scheme.

As you know, rent increases are outstripping wages growth and inflation. This is making it harder for Australians on low to moderate incomes in the private rental market.

The National Rental Affordability Scheme is a major supply-side initiative to make rental properties more affordable by encouraging large-scale investment in rental housing for low and moderate income families and individuals.

It aims to assist institutional investors, developers and not-for-profit groups to deliver 50,000 rental dwellings over the next four financial years by creating a new residential property asset class for property investors.

The Scheme offers significant financial incentives to applicants commencing at a minimum value of $8,000 per dwelling annually, for a period of 10 years.

The Incentives provided under the Scheme will assist investors to develop proposals that provide an attractive rate of return. It presents 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 projects that will be made available through the Scheme.

This document has been developed to provide information to institutions and organisations that are considering investment in affordable rental housing.

We trust this information will assist business to develop proposals to take up the incentives on offer.

Yours sincerely

The Hon. Tanya Plibersek MP Minister for Housing

The Hon. Wayne Swan MP Treasurer

2

1: Introduction to the National Rental Affordability Scheme

The Australian Government has established the National Rental Affordability Scheme (’the Scheme’) to stimulate the supply of up to 50,000 new affordable rental dwellings. This meets one of the Government’s key election commitments.

The NRAS provides a new opportunity for governments, the business sector and not-for-profit organisations to work together to increase the supply of affordable private rental housing for families and individuals across Australia.

The Scheme will help to create a new class of investment in the housing market – one that attracts significant support from the Australian Government in the form of the National Rental Incentive, with additional support from State and Territory governments.

The Scheme provides 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.

It is estimated that 1.5 million households, including key workers, their families, and people on low to moderate incomes, are eligible for affordable rental properties under the Scheme.

If market demand remains strong a further 50,000 incentives will be available from 2012. This highlights the Government’s commitment to support the establishment of a new specialist sector of the property development industry.

Timely advice will be provided if these additional incentives will be made available for allocation under the Scheme.

The National Rental Affordability Scheme described in this document is subject to the passage of legislation. At the time of issuing this document the legislation has not been passed.

The Scheme will help to create a new class of investment in the housing market.


2: Benefits to Investors

Participation in the National Rental Affordability Scheme offers a number of benefits to investors in affordable residential rental properties.

Improved Rental Yields

The minimum annual $8,000 National Rental Incentive for each approved rental dwelling can >>

improve rental yields over conventional residential investment properties in certain markets.

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.

Reduced Risk Profile

With rents set at 20 per cent below market value, and a large pool of eligible tenants, investors >>

can expect a reduced vacancy risk.

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 National Rental Incentive will be indexed to the rental component of the CPI.

A New Asset Class

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.

Potential applications for incentives will be able to apply for allocations over forward rounds >>

to allow for the staged roll-out of affordable rental dwellings, providing certainty for successful applicants.

Linkages with other affordable housing initiatives

Potential investors and developers are encouraged to take full advantage of possible linkages >>

with other affordable housing initiatives, including the Commonwealth Government’s Housing Affordability Fund.

Large and diverse pool of potential tenants

Up to 1.5 million individuals and families on low and moderate incomes will be eligible to be >>

tenants in approved NRAS dwellings.

Income eligibility levels for prospective tenants include key workers and their families, vital to >>

Australia’s continuing economic prosperity.

Ethical Investment

Investing in affordable housing through the National Rental Affordability Scheme offers investment >>

opportunities that may meet investors' own criteria for building ethical investment portfolios.

A further 50,000 incentives will be allocated from July 2012 if demand from investors and tenants remains strong.

4

3: A Snapshot of the Residential Property Market in Australia

Important: The information provided below was current at the time of printing and is intended to be indicative of the general housing market across Australia. Potential applicants for National Rental Affordability Scheme incentives should make their own enquiries specific to the location of the proposed development before making an application.

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.

The challenge of entering into home ownership has become more difficult over the past year, as interest rates and house prices have both increased. Over the 12 months to May 2008, the number of loans to first home buyers has fallen by around 22 per cent.

Accordingly, prospective first home buyers are staying in the rental market longer, increasing the demand for rental properties.

Australia’s Residential Rental Market

Australia has a shortage of residential rental properties. Access to affordable housing is constraining the ability of businesses to attract appropriate staff in capital cities and regional areas.

As at June 2008, rental vacancy rates were below 3 per cent in all capital cities. In Sydney, Melbourne, Perth, Adelaide and Darwin, they were at or below 2 per cent.1 The rental component of the CPI increased by 7.1 per cent over the twelve months to March 2008, significantly higher than the general rate of inflation for the same period.

The rate of rent increases is outstripping wages growth, making rental housing less affordable for Australians on low to moderate incomes.

Data from the Australian Bureau of Statistics for 2006 indicates that, of all private rental households, almost one-third pay over 30 per cent of their income in housing costs, a widely accepted benchmark of rental stress.2

As the figures above indicate, there is a need to increase the supply of rental dwellings in all major real estate markets throughout Australia.

The Scheme is designed to make renting more affordable in two key ways, an overall increase in the number of rental dwellings and through the fixed term rental discount of 20 per cent.

1 Real Estate Institute of Australia, Mortgage Choice/Real Estate Market Facts, March Quarter 2008.2 Australian Bureau of Statistics, 2006 Census of Population and Housing, June 2007.

It is estimated that Australia currently has an annual housing supply deficit of up to 30,000 homes.


affordable rent

loan funds

debt service payments

tenancy and asset

management services

affordablerent payments

managementfees

maintenanceservices

State capital funding

National Rental Incentive

Bank or other provider of debt finance

CharitableOrganisation

Tenants

Commonwealth Rent Assistance

Retail investors

Trust vehicle

Asset Manager

Tenants

Philanthropic contribution capitals

New Housing Stock


New Housing stock

capital gain on exit

distributions

capital

managementfees

maintenanceservices

Bank etc

Institutional Investor

Not for Profit Housing Group

Asset Manager

Tenants

New Housing stock

rental services & support

contracted development manager

State capitalcontribution

Local governmentland contribution



dividends

capital

debt service

managementfees

maintenanceservices


Asset Manager New Housing stock




management fees




Tenants

management fees


Tenancy Manager

affordablerent

affordablerent

Tenancy Manager

Investment Scenario 1

Aged Accommodation Sector Project

The annual Australian Government contribution of $6,000 is used to bridge the debt servicing gap

for a charitable organisation providing rental housing for low and moderate income older persons.

The charity may be in receipt of philanthropic support, in the form of cash grants or land.

The State/Territory Government’s minimum $2,000 per year contribution could be delivered via

one off capital grants of, say, $20,000 per dwelling unit at project commencement. Loan funds

are raised for the difference between the procurement cost of the units and the combined

value of the capital grants from the State/Territory and donors.

Debt service payments are made out of operating surpluses, generated from the annual

Australian Government component of the National Rental Incentive payments and affordable

rents. By acting as developer, possibly with the assistance of a professional project manager,

the charitable organisation may be able to reduce the procurement cost of the units. Subject

to the requirements of the Goods and Services Tax Act, charitable organisations may also

achieve GST savings.

Depending on the size of the up front capital contributions, the charity may have cleared the

debt on the units at the end of ten years.

6

4: Investor Incentives

Successful applicants in the National Rental Affordability Scheme will be eligible for significant financial incentives not available to conventional, individual residential property investors.

Subject to compliance with the Scheme, each approved dwelling under the Scheme will attract an annual National Rental Incentive with a minimum value of $8,000, comprising:

an Australian Government contribution of $6,000 (indexed) in the form of a refundable tax >>

offset or a cash payments each year for 10 years; and

a $2,000 (indexed) State/Territory contribution, which may be offered as cash or support in >>

kind each year for 10 years.

While the majority of National Rental Incentives will be in the form of a refundable tax offset, not-for-profit organisations that are endorsed as a charity with the Australian Taxation Office will have the option of receiving the incentive as a cash payment from the Australian Government. Entities which are not-for-profit but not endorsed as charities will be entitled to claim the refund through the lodgement of an income tax return.

The National Rental Incentive will be indexed annually on 1 July based on movements in the rental component of the Consumer Price Index as at the preceding December quarter. This will begin in the 2009–10 financial year, with the 2008–09 financial year serving as the base.

State/Territory contributions vary across jurisdictions and are outlined in the Scheme’s Program Guidelines which are available from the Department’s website at www.fahcsia.gov.au. Discussion between the applicant and the relevant State/Territory authorities is encouraged prior to any application being submitted.

5: Investor Eligibility

The 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.

The Scheme is targeting financial institutions with an interest in this new class of residential property investment.


6: Liquidity of Residential Rental Properties in the Scheme

The Scheme targets investors interested in a medium-term financial investment in affordable housing.

Recipients of the National Rental Incentive are expected to hold National Rental Affordability Scheme approved dwellings for a period of 10 years.

Recipients under the Scheme are able to sell dwellings during the 10-year holding period without penalty when either of the following occurs:

a dwelling is sold to another investor and the purchaser undertakes to comply with the existing >>

obligations under the Scheme; or

an equivalent dwelling is offered as a substitute dwelling for the remaining part of the 10-year >>

period. The substitute dwelling must be of an equivalent type and in a similar location as the dwelling that was sold. Dwellings must be substituted within thirteen weeks of the date of sale of the original dwelling.

Incentive recipients who sell dwellings in circumstances other than those identified above may be subject to civil penalties. In these circumstances, action may also be taken by the relevant State/Territory Government.

Australian Government penalties are outlined in the Scheme’s Program Guidelines which are available from the Department’s website at www.fahcsia.gov.au

7: Assessing Rates of Return

Models or estimates of rates of return, yield and cash flow for particular dwellings are affected by many factors which are specific to the project in question and the participants in it.

Modelling of the impact of the National Rental Incentive in a number of reasonable scenarios illustrates that it can provide market rates of return to levels that are strongly competitive with other forms of institutional investment.

Rates of return may vary, of course, under different circumstances. Potential applicants under the Scheme will need to rely on their own methods for estimating likely impacts of the National Rental Incentive for their particular projects and should seek independent financial advice.

Pre-and Post-Tax Rates of Return

These features of the Scheme may impact on pre-tax and post-tax rates of return:

The National Rental Incentive is free of income tax.>>

New dwellings under the Scheme can qualify for depreciation allowances.>>

Subject to the requirements of the >> A New Tax System (Goods and Services Tax Act, 1999) charitable organisations may achieve goods and services tax savings.

Unit costs of construction and management may be reduced substantially where dwellings in >>

receipt of National Rental Incentive are part of a larger project or portfolio which also includes conventional residential dwellings.

The Scheme targets investors interested in a medium-term financial investment in affordable housing.

8

affordable rent

loan funds


tenancy and asset

management services


managementfees

maintenanceservices





Tenants


Retail investors

Trust vehicle

Asset Manager

Tenants


New Housing Stock


New Housing stock


distributions

capital

managementfees

maintenanceservices

Bank etc



Asset Manager

Tenants

New Housing stock







dividends

capital

debt service

managementfees

maintenanceservices






management fees




Tenants

management fees


Tenancy Manager

affordablerent

affordablerent

Tenancy Manager


Retail Investment

A Trust Vehicle, attracting equity from retail investors is at the heart of this scenario. The Trust

would distribute periodic dividends as well as a capital gain at the end of 10 years if the NRAS

stock is sold off.

The Trust would appoint a tenancy manager, which may be a not-for-profit housing association

with experience in the lower rent sector. This would occur on a fee for service basis. Similarly,

the Trust may contract a provider to take care of asset maintenance. The discounted market

rent paid by tenants and the National Rental Incentive would be combined to provide an

adequate return to investors, after tenancy operating costs. The Trust vehicle could be the

developer, which would afford investors an immediate margin on procurement costs. NRAS

stock could be part of a diversified portfolio of rental housing held by the Trust, enabling scale

efficiencies in stock and tenancy management.

Risk-Adjusted Rates of Return

These features of the Scheme may impact on risk-adjusted rates of return:

Investors’ gross yield will include the National Rental Incentive which is income tax free.>>

Investors may seek to negotiate a guaranteed level of rental income from their >>

appointed tenancy managers.

Subject to compliance with the Scheme requirements, investors can select locations >>

and type of dwellings which optimise likely growth in rental receipts and capital value.

An investor’s selection under the Scheme may include a mix of high- and low-return >>

dwellings.

The National Rental Incentive is free of income tax.


8: Important Dates for Investors

The National Rental Affordability Scheme will be implemented in two phases – an Establishment Phase and an Expansion Phase.

Establishment Phase

There will be two Application Rounds for incentives in the Establishment Phase.

Round 1 will open in late July and will focus on proposals that can deliver completed dwellings which will be available for rent during the 2008-09 and 2009-10 financial years.

A second application round for incentives in the Establishment Phase, Round 2, will be issued in October 2008.

Note that proposals received in Round 1 and Round 2 that also seek an allocation of incentives for projects in the Expansion Phase will be accepted and assessed at this time.

The key dates for the Establishment Phase are as follows:

Round 1

Applications open 24 July 2008

Applications close 4 September 2008 (a)

FaHCSIA to advise of likely incentive allocations to successful applicants

13 October 2008

Allocation of incentives to successful applicants As soon as Legislation is passed

Round 2

Applications open 25 October 2008

Applications close 12 January 2009

Allocation of incentives to successful applicants 2 March 2009

(a) Applications will be given the opportunity to refine their applications in the event that there are any changes to the National Rental Affordability Scheme as a result of the legislation implementing the Scheme. This legislation is expected to be introduced into Parliament in September 2008.

The Establishment Phase will operate during the 2008/09 and 2009/10 financial years. The numbers of incentives to be allocated in each financial year are as follows:

2008/09: 3,500 incentives 2009/10: 7,500 incentives Total over the Establishment Phase: 11,000 incentives

Any unallocated incentives from the Establishment Phase will be rolled over to the Expansion Phase of the Scheme.

Investors’ gross yield will include the National Rental Incentive which is income tax free.

10

Expansion Phase

Round 3 will occur in March 2009 for proposals that can deliver dwellings available for rent in the Expansion Phase from July 2010 to June 2012. Any remaining Incentives from the Establishment Phase will also be allocated in this Round.

The key dates for the Expansion Phase are as follows:

Round 3 (Expansion Phase)

Applications open 7 March 2009

Applications close 1 June 2009

Allocation of NRI to successful applicants 27 July 2009

The numbers of National Rental Incentives to be allocated during each financial year of the Expansion Phase are as follows:

2010/11: 14,000 incentives 2011/12: 25,000 incentives Total during Expansion Phase: 39,000 incentives

Incentives allocated to successful investors in Round 3 during the Expansion Phase (to be held in the first-half of 2009) will only apply to dwellings that will be available for tenancy no later than 30 June 2012.

Any incentives not allocated in Round 3 will be allocated to successful applicants in subsequent annual application rounds to be held in August 2010 and in August 2011.

Further Incentives May Be Available from July 2012

Subject to continuing strong market demand from both investors and tenants an additional 50,000 incentives may be allocated under the Scheme for the construction of affordable rental dwellings from July 2012,

The market will be advised at an appropriate time if the incentives for the additional 50,000 dwellings will be made available for allocation.

Any unallocated incentives from the Establishment Phase will be rolled over to the Expansion Phase of the Scheme.

affordable rent

loan funds


tenancy and asset

management services


managementfees

maintenanceservices





Tenants


Retail investors

Trust vehicle

Asset Manager

Tenants


New Housing Stock


New Housing stock


distributions

capital

managementfees

maintenanceservices

Bank etc



Asset Manager

Tenants

New Housing stock







dividends

capital

debt service

managementfees

maintenanceservices






management fees




Tenants

management fees


Tenancy Manager

affordablerent

affordablerent

Tenancy Manager



Not for Profit Housing Provider as Developer

An endorsed charity which is a Housing Association or community housing organisation would

develop new housing stock, retaining a contracted project manager. The difference between the

market value of this stock and its procurement cost (the developer’s margin) plus any cost savings

from tax exemptions arising from charitable organisation status would form part of the equity of the

community housing group. Part of the remaining equity could be funded from capital grants from the

State and local government, including through the provision of land at sub-market prices. Depending

on these capital contributions, and the projected surpluses on rental operations, some costs might

also be funded via conventional borrowings. The remaining equity could be offered to an institutional

investor, or retail investors (via a suitable syndication vehicle). These investors might receive a fixed

dividend (coupon rate) during the currency of the NRAS subsidy period. Any capital gains (or losses)

on exit would be shared pro-rata according to equity stakes. Over time, the borrowing capacity of the

not-for-profit housing organisation may indeed improve with a strengthening balance sheet. This may

enable the group to buy out the private sector investor(s) thereby retaining the NRAS induced stock

within the affordable sector indefinitely.

12

9: Applying for the National Rental Affordability Scheme

Applicants seeking to submit proposals for one or more projects to the National Rental Affordability Scheme will need to complete an application form and supply supporting information.

Allocation of National Rental Incentives will be conducted as a competitive selection process.

Application Kits are available from the National Rental Affordability Scheme, Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) website, follow the housing link at fahcsia.gov.au or by contacting the National Rental Affordability Scheme on 1800 334 505.

Application Kits contain the following documents:

Application Form.>>

Application Guidelines.>>

Program Guidelines.>>

Contact details for the Scheme are on page 13.

10: Partnership Facilitators and the Interest Register

If you are interested in playing a specific role in a residential property development under the National Rental Affordability Scheme and are seeking other partners for your potential project, you may wish to register your interest with the Scheme’s Interest Register.

The National Rental Affordability Scheme has engaged a number of Partnership Facilitators .

The Partnership Facilitators will be provided with a list of all parties on the Interest Register and will work cooperatively to introduce and bring parties with relevant expertise together with a view to forming a consortium or other commercial arrangement for the purposes of investing in and developing residential property projects through the Scheme.

The Partnership Facilitators will be available to interested investors and not-for-profit organisations during the Establishment Phase.

Please contact the National Rental Affordability Scheme on 1800 334 505 or visit the website at www.fahcsia.gov.au to have your company or organisation included on the Interest Register.

Allocation of National Rental Incentives will be conducted as a competitive selection process.

affordable rent

loan funds


tenancy and asset

management services


managementfees

maintenanceservices





Tenants


Retail investors

Trust vehicle

Asset Manager

Tenants


New Housing Stock


New Housing stock


distributions

capital

managementfees

maintenanceservices

Bank etc



Asset Manager

Tenants

New Housing stock







dividends

capital

debt service

managementfees

maintenanceservices






management fees




Tenants

management fees


Tenancy Manager

affordablerent

affordablerent

Tenancy Manager


11: Contacting the National Rental Affordability Scheme

Potential investors requiring further information can contact the National Rental Affordability Scheme.

Section ManagerNational Rental Affordability Scheme Affordable Housing Branch Department of Families, Housing, Community Services and Indigenous Affairs PO Box 7576 Canberra Business Centre ACT 2610

Phone: 1800 334 505 Website: www.fahcsia.gov.au

Email: [email protected]


Institutional Investment

An institutional investor, such as a superannuation fund, would acquire new stock by outright

purchase, contracting a development manager, or establishing an in-house capability in this

area. The investor could appoint either a commercial tenancy manager, or a not-for-profit

housing provider with experience in this sector of the rental market. The National Rental

Incentive would flow directly to the institutional investor, representing, in effect, a government

guaranteed base to the investment returns. The rent stream would pass through the tenancy

manager. Capital gains on disposal of the stock at the conclusion of the 10-year period may be

factored into the investment equation depending on the institution’s appetite for this risk.

A variation on this scenario could see a developer ‘package up’ all or a portion of a project,

including tenancy management arrangements and then on-selling this package to an

institutional investor, so that it operates in the fashion outlined.

14

Australian Capital TerritoryElizabeth Judd Senior Manager Strategic Priorities Division Chief Minister’s Department Phone: (02) 6205 4622

New South WalesHelen O’Loughlin Director Centre for Affordable Housing Phone: (02) 8753 8185 Email: [email protected]

Northern TerritoryDirector Economic and Social Analysis NT Treasury Phone: (08) 8999 6546

QueenslandKevin Bottle Private Housing Support Qld Department of Housing Phone: (07) 3227 7949

Western AustraliaSimon Taylor Phone: (08) 9222 9328 Email: [email protected]

South AustraliaJustin Shadiac Project Facilitator for the NRAS Affordable Housing Innovations Unit of Housing SA Department for Families and Communities Level 8, Terrace Towers, 178 North Terrace Adelaide SA 5000 PO Box 292, Adelaide SA 5001 Phone: (08) 8124 4075 Fax: (08) 8124 4099 Email: [email protected]

TasmaniaPeter White Manager Housing Innovation Unit Department of Health and Human Services GPO Box 125 HOBART TAS 7001 Phone: (03) 6233 8952 Fax: (03) 6233 4778 Email: [email protected]

VictoriaSpecific state based queries should in the first instance be directed to the following email contact: [email protected]. Further information, including a copy of the Principles to guide the allocation of NRAS funding in Victoria, is available at www.housing.vic.gov.au/nras.

12: State and Territory Contacts

Potential investors may wish to contact the relevant authority in the State or Territory where the proposed development is located to discuss the exact nature of incentives on offer in that jurisdiction.

13: Glossary

Applicant An entity applying for National Rental Incentives through the National Rental Affordability Scheme.

Approved Dwelling A dwelling approved to attract the National Rental Incentive under the National Rental Affordability Scheme after successful application

FaHCSIA The Commonwealth Department of Families, Housing, Community Services and Indigenous Affairs

National Rental Incentive (NRI)

The total incentive available to approved investors, comprising a Commonwealth contribution of $6,000 and a State/Territory contribution of $2,000 per dwelling per annum (indexed to the rental component of the Consumer Price Index – CPI)

Recipient An entity that receives the National Rental Incentive through the National Rental Affordability Scheme

The Scheme The National Rental Affordability Scheme


14: Legal Disclaimer and Privacy Statement

IMPORTANT NOTICE

Neither the Australian Government nor any State or Territory government takes any responsibility for the merits of any property investment, or property investment in association with the National Rental Affordability Scheme.

This document provides information on the planned framework for the National Rental Affordability Scheme and the incentives to be made available to those who rent approved dwellings to low and moderate income households at a rental at least 20 per cent below market rates. Note that the National Rental Affordability Scheme is subject to the passage of legislation. At the time of issuing this document this legislation has not been passed.

Note to Applicants

This document contains general information only and does not take into account the investment objectives, financial situation or particular needs of any investor or potential applicant under the Scheme.

This document should not be construed as financial, taxation, legal or other advice. It is important that you read this document carefully and in full before deciding to apply for an allocation of incentive under the National Rental Affordability Scheme. In particular, in considering the prospects of investment in housing and participation in the National Rental Affordability Scheme, you should consider the assumptions underlying the rates of return and, the risk factors that could affect the financial performance of the housing industry in light of your personal circumstances (including financial and taxation issues). You should seek professional advice from your accountant, stockbroker, lawyer or other professional adviser before deciding to apply for an incentive under the National Rental Affordability Scheme or investing in property for rental to low to moderate income households.

Disclaimer

Subject to Parts 11 and 12 of this document, no person named in this document, nor the Australian Government, nor any other person: (a) guarantees the performance of any property investment, the repayment of capital or the payment of a return on investment in rental housing; or (b) guarantees the entitlement of any person to an incentive under the National Rental Affordability Scheme.

Privacy Statement

Potential applicants should note that all applications received will be processed by the Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA), and may also be provided to the Australian Taxation Office and the governments of the State or Territory where the project is intended to take place.

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National Rental Affordability Scheme Prospectusadasound.com.au/wp-content/uploads/2010/12/nras_prospectus.pdf · 3 National Rental Affordability Scheme Prospectus 2: Benefits to Investors