Does anybody know anythink about the new ATO ruling brought out on the 19th Dec 2009 regarding NRAS stating that investers who lease their NRAS property as stated in your artical are not deemed to be able to claim the tax offset that the offset in fact goes to the consortium not the investor. At this stage we have not officially signed a 10 year lease with the charitable organisation who in turns then puts in place a property manager. Could anyone please clarify that we have read the artical right and if so as to how the government is now approaching this matter. Can we do this using a local estate agent as the property manager in the area where the house is being built. We would be very grateful for any info on this matter you can give us, as we are nearing the completion of the house. Thankyou very much JPS25
Hi JPS,
I posted this on another NRAS thread – might help. Cheers, Gary
I had the same concern as I found that ruling as well. However, there is more information on the general ATO website. The key issue is that the individual dwelling owner needs to enter into the lease directly with the tenants, not the property manager (i.e. the community housing agency). The agency can act as the property manager though. See this page on the website:
http://www.ato.gov.au/businesses/content.asp?doc=/content/00225605.htm&page=23&H23
Hopefully someone currently in the scheme can further reassure us.
Hi Gary,
Thanks for your reply. Yes I had seen that page too, but I as I understand it we are supposed to sign a headlease with the consortium. By doing so we grant the consortium the right to grant a residential lease to NRAS eligible tenants. Therefore it is the consortium who has right to the tax breaks. So not really sure where we will stand over the new ruling all depends on which way you read the examples on the ATO site. We are planning to see the builders next weekend so hopefully will find out more info then and keep you posted. The house we are having built is not far off completion so will be doing the paperwork for the lease etc soon.
Lets hope someone who has been through it or further along can give us further info on how the new ruling effects the tax breaks.Hi JPS,
Hope it gets sorted okay – let me know how it goes.
Other than the leasing issue, how was the buying process for you? Any problems getting finance etc?
Also interested to know where you bought & which consortium – am looking at buying soon myself but still not sure where.
Cheers, Gary
Hi Gary,
We originally were going with Brisbane Property Brokers, but they messed us up a bit as to which house plan was for which plot of land, so in the end we contacted the developers direct and they where very helpful , so we have done everything so far through them. We got in touvh with them on a Monday and I had contracts in my hand on the Wednesday. They have sent us photo's of the progress since the start of the house being built. We are building in Chinchilla they have plots with Surat basin Homes http://www.suratbasinhomes.com.au they have plots of land already NRAS approved. The consortium is or will be QAHC. As regards finance we had no problems at all we did it through our own home lender and the whole process so far has gone quite quickly.
Hopefully the lease will be sorted out soon bound to be teething problems being a new scheme I suppose but that is the only bad thing so far the uncertainty of it. Good LuckHi Gary I have been in touch with QAHC and not to worry things are in the process of being sorted
Hi Gary,
Recieved this the other day not sure if you saw it. We also went out to see the house we are building, its coming along good. Spoke with our builders though and they reckon a lot of investors going for the NRAS are having trouble getting finance and pulling out because of it. We are wieghing up are options as to carry on or rent out to the private market. The house we are building is in Chinchilla so should be in a good position either way.Mr Mike Myers Chief Executive OfficerQueensland Affordable Housing Consortium Ltd. Dear Mike,I am writing on behalf of the Department of Families, Housing, Community Services and Indigenous Affairs to confirm that the Government’s intention is that investors receive their full entitlement to the NRAS Incentive.The Hon Tanya Plibersek MP, Minister for Housing wrote to QAHC on the 24 December 2009 to address the consortium’s concerns related to whether investors are entitled to receive the full value of the NRAS incentive and to address any perceived ambiguity created as a result of the Australian Taxation Office’s ATOID 2009/146, in particular its reference to NEJV and participation in NRAS. The Minister and Treasurer committed to a workable solution through an initial administrative solution and longer term to a legislative fix. As advised in the letter of 13 January 2010 the Department has worked with the ATO to finalise an administrative solution to resolving the tax issues for non-entity joint ventures who may be affected in the 2009/10 financial year. Regulatory and legislative amendments will be introduced in 2010 to effect a permanent fix for future years. An administrative solution has been agreed and is in the process of being implemented and will address the issue where, under current arrangements, certain entities participating as members of joint ventures involving head leasing and sub leasing arrangements may potentially have their NRAS Incentive taxed. The ATO has advised the Department that, depending on the legal form of the certificate, Incentives may be received tax free by the lead agency/approved participant; but they cannot be passed on to other members of the joint venture such as the investor/owner of the dwelling without a potential tax liability being passed onto the investor/owner. When the lead agency passes on the incentive to the dwelling owner, income tax could be applied to the payment. The administrative solution will resolve the issue by issuing tax offset certificates directly to the investors/owners and in a format that will meet the ATO’s requirements to enable the offset to be obtained by the NRAS investor/dwelling owner without tax applying. The lead agency will also receive a consolidated copy of the certificates with dwelling schedules, as is current practice, for their records. The ATO has confirmed that this approach will meet their requirements. This approach is a short term solution to give practical effect to the Scheme’s policy intent that investors receive the full entitlement of the NRAS Incentive. I hope this letter is of assistance in clarifying the approach to the administrative solution and look forward to working with you to ensure the success of this solution. Yours sincerely Susan FinniganBranch ManagerAffordable Housing Branch8/02/2010 Hope this is of help to you in your decision
Hey JPS,
Thanks for posting – I have seen the letter, the NRAS people I’m talking to sent it to me.
I hope your finance works out ok, A couple of other Forumites have bought NRAS & said they had no trouble getting finance, & at least one was with one of the main banks. I believe lenders were a bit wary early on, due to a fair bit of misinformation about how NRAS works, but hopefully it’s better now.
I’m looking at buying a town house in Carseldine myself, will just make sure the contract is Subject to Finance.
Cheers, Gary
Hi Gary,
We had no trouble at all with finance our IP is almost finished, we went through Heritage building society and they have been great. The builders also commented on how prompt they were paying the invoices for each stage of the building process compared to other banks. What we have to decide as we seem to be the only one that has gone through ok out there is to whether or not carry on with NRAS or rent out to the private sector. Going to see what QAHC and Horizon say about that before making a final decision to sign a lease.
Good luck with yours. Let me know how you get on.Hi all,
New to this place.
We are looking at purchasing a NRAS eligibly property here in SA.
A couple of questions.
Someone mentioned in another thread that it would be impossible to get mortgage lenders insurance for a property in the NRAS scheme – how is this the case? As far as i can tell, the bank is simply lending for a house and land package as an investment and the NRAS scheme is a separate issue. It is not mentioned anywhere in the purchase contracts…
Also, does anyone know if we will have trouble freeing up the equity in the property while it is still in the scheme? I heard a whisper that the banks won't allow this?
Cheers…
Hi BrettJD,
Don’t know the answers to the lending questions – if you’re using a mortgage broker I’m sure they could find out for you. One thing they should be aware of is that you can withdraw from NRAS at any time (though you may lose some of that year’s tax incentive), unlike Defence Housing where the property is locked in the scheme for the duration. That might make a difference.
If you don’t mind I’d be interested to hear about the NRAS opportunity in SA, I haven’t come across any of those as yet.
Cheers, Gary
Hi Brett,
We have a house about 8 weeks from completion being built for the scheme down here in QLD. We had no trouble getting finance through Heritage Building Society, but we were lucky enough to have plenty of equity in our own home so I am afraid I don't know about lenders Insurance. I do know from others on this site and our builder that others have had problems getting finance mainly because of the terms of the lease. The banks do need to see it so its best to let them know upfront about what you are planning to do. Others on here have mentioned that the NAB have been fine with it so maybe try them, and see what they say.
The lease is the main problem as some banks are looking at what happens if the property is repossessed and the tenant has a long lease in place. That is what our builder told us, even some seasoned investors have been knocked back so check out the Nab and see how you get on with them.
When we applied for ours it was mentioned that we would use the equity in the investment property later on to buy another property, our bank manager didn't have a problem with it. So again just be upfront and ask at the time of getting your loan.Good Luck
garybatz wrote:Hi BrettJD, Don't know the answers to the lending questions – if you're using a mortgage broker I'm sure they could find out for you. One thing they should be aware of is that you can withdraw from NRAS at any time (though you may lose some of that year's tax incentive), unlike Defence Housing where the property is locked in the scheme for the duration. That might make a difference. If you don't mind I'd be interested to hear about the NRAS opportunity in SA, I haven't come across any of those as yet. Cheers, GaryThanks Gary – i'd be happy to give you the details about NRAS in SA but i can't work out how to PM you…
I'm obviously new around here – is it acceptable for me to post details such as this in the public realm?
Hi Brett.. I don’t know how to PM either
I have seen other similar information about properties & companies posted in public here so I believe it would be ok.
Gary
Gary,
The opportunity was through Ironfish.
I am unsure if i am going to go through with it because i am unhappy with the contract with the developer.
Of course, that doesn't mean everyone would be unhappy with the contract…
I have been offered to purchase property of the plan 3 bedroom unit classified as a house because it has an independent address for the price of $330,000. I am told that the property has already gone up since last year by 40K. I am told that I should expect $400-$500 per week in rent. However the median prices in the area are $240,000 and rentals at the moment are $280. Apparently the property should expect to go up because of all the mining that is going on in the area.
The government announced that there will be a tax increase for mining companies.
Does anyone have any insight on this????
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