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WANT TO RECEIVE $100,000 TAX FREE FROM THE GOVERNMENT OVER THE NEXT TEN YEARS?!

Are you interested in investing in property?

Want all of the tax benefits of negative gearing but don't want the cashflow shortfall associated with negative gearing?

Already have a negatively geared property and would like to reduce the cashflow shortfall?

There is a solution.

Negatively geared cash flow positive rental properties.

The Federal Government introduced the National Rental Affordability Scheme (NRAS) which currently pays $9,981 per year indexed to CPI as a tax offset to you if you invest in an NRAS approved property investment.  The NRAS payment is paid to you each year for 10 years or until you opt out of the scheme.  The payment is tax free! 

NRAS is only for brand new NRAS approved properties.  It is not social housing, Suitable tenants must meet strict rental criteria and be employed, and is aimed at key workers like emergency services personnel, hospital staff and retail employees.  NRAS properties include apartments, townhouses and houses in inner and outer suburbs and in a range of price categories.

The only proviso to obtain the NRAS payment is that you charge 80% of the market rent rather than the full market rent on the property.  However, despite the reduction in rent you are still way ahead of a non-NRAS property and will be cashflow positive!

Here is an example of the ongoing costs of a non NRAS property compared with an NRAS property.

Assumptions:  Property costing $350,000, rental $360pw

 

                                     Non-NRAS                                                    NRAS

Rent                                $18,720                                                     $14,976

Less: Rental Expenses

Interest 100% 6.5%            $22,750                                                    $22,750

Management                   $ 2,059                                                    $ 2,645

Depreciation                    $ 7,000                                                     $ 7,000

Rates/Insurance etc         $ 2,500                                                    $  2,500

 

Negative gearing loss   ($15,589)                                                  ($19,919)

Tax refund at 31.5%          $ 4,910                                                     $ 6,274

NRAS Incentive                                                                                 $ 9,981   

Nett cashflow                 ($3,679)   Negative                                     $3,336  Positive

 

Difference between NRAS and non-NRAS is $7,015.

NRAS property can be purchased inside or outside of superannuation.

If you want to know more on how the NRAS scheme would affect your personal situation, please do not hesitate to contact this office.

 

 

 

 

 

 

 

This article is not a substitute for independent professional advice. We do not warrant the accuracy, completeness or adequacy of the information or material in this article. All information is subject to change without notice. We and each party providing material displayed in this article disclaim liability to all persons or organisations in relation to any action(s) taken on the basis of currency or accuracy of the information or material, or any loss or damage suffered in connection with that information or material. You should make your own enquiries before entering into any transaction on the basis of the information or material in this article. Please ensure you contact us to discuss your particular circumstances and how the information provided applies to your situation.

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