NRA - Affordable Housing Scheme - Tax Offset Question

Hi,

I would like to know if the below is correct (not too concerned about the actual $ amount accuracy):

Affordable Housing Incentives for 2018 FY is $11,114.33

25% of $11,114.33 is the State Government portion and will be paid in full to the owner of the Affordable housing property for that year and each year under Affordable Housing.

75% of $11,114.33 is the Federal Government portion. This will be a tax offset so assuming the tax offset here is $8000, if for the same financial year I still have tax payable say 8000 exactly also, I can claim that remaining 8000 tax payable back from that offset right?

Also, if hypothetically I do not have any tax payable for 2018 FY due to claiming other tax deductions (not related to this NRA property at all), would this $8000 be rolled over as a capital loss to the following year?

 

No, you will receive that in cash basically. I was pleasantly surprised last year when I did my return as I had travelled and only made approx $40k that year with some being on ABN so owed tax. After all my property depreciation etc ended up getting a nice return with my accountant stating it was the NRAS $7500 odd paid direct.

Be worth looking up as I was surprised but wasn't going to argue with the accountant

 

The fed component is an RTO - the R being the magic letter. REFUNDABLE Tax Offset. You receive the money IN ADDITION to whatever other tax refund is coming your way. It is NOT part of the neg gearing side of the equation. Its pure, glorious tax free money - paid to you no matter your residential status, marginal tax rate, age, sex, religion or anything else. The State part ( 25% ) is called a NANE - Non Assessable Non Exempt payment - and just like the Fed portion (75% ) it is also 100% tax free and paid to you in full each year for 10 years provided you do 3 things

1. rent out the property at 20% below market rent
2. rent the property to an eligible ( income tested) tenant
3. have 91 days (13 weeks) vacancy or less.

Pretty much a zero chance of not meeting all 3 requirements, but if you have more than 91 days vacancy, the tax credits start to reduce on a pro rata ( daily) basis from day 92 , right up until day 182 ( 26 weeks) - If by some miracle /impossibility your 20% cheaper property does manage to remain vacant for 182 days , then you receive diddly squat from either the feds or the state... although I guess you'd have a chunky neg gearing refund if you ran a property as vacant for 6 months out of 12 ... so thats something

More seriously though , NRAS as a cash cow is basically as close as you can get to bullet proof tax free money in this day and age. Its not completely bullet proof or idiot proof though... technically its possible to screw the pooch. But someone would have to go to a remarkable effort to disqualify an NRAS approved dwelling from eligibility.

 

PS - its called NRAS not NRA

National Rental Affordability Scheme

 

There is an additional rebate of $3458 from the NRA if you shoot you're tenant.

 

Except in the ACT......

 

And some cases in NSW. These instances in ACT and NSW are called NRAS B

 

Don't forget not all the interest on the loan would be deductible where you are receiving NANE so you must apportion it.

Tax Tip 70: NRAS Property and Deductibility of Interest and other expenses https://propertychat.com.au/communi...tibility-of-interest-and-other-expenses.5206/