Hi Thinktank
this was an issue with head lease structures but has been basically resolved from ATO point of view pending some legislation to fix it.
Its all so new so there have been some teething problems! One thing that still seems to be an issue in the latest from ATO is the reference to husband and wife partnerships not being able to get NRAS tax credit if in a head lease arrangement. Unless they are only referring to a "formal" partnership set up which is not what it says. Anyone who has bought in joint names should clarify this.
You do not necessarily need to buy a property from a NRAS accredited developer to qualify for the scheme. The scheme is open to all new properties that are located close to infrastructure. The Government have key areas that they are targeting for this scheme.
Therefore, you can look for land in areas you think you will get good growth then have the property assessed and if it is approved then you can go ahead with your plans of building. The benefit of using this method is that you will be making a small development margin and hence accelerating your wealth creation potential.
Most marketing companies are paid tens of thousands by developers to market their sock to investors therefore you will also be bypassing the middlemen if you are prepared to some of the work yourself. The good news is that there are companies that can help you get your properties assessed under the scheme and a NRAS approved property management plan.
Something to consider…
so Sailesh are you saying that you could do a small development like a stand alone duplex and obtain NRAS for it and then keep it and the tax benefits ? I thought you had to partner with a not-for-profit to do this? Also thought that the application process was very complex….
nras properties were approved by the fed govt in cosultation with the state govt under rounds 1 and 2.
The feds changed the scheme so that in round 3 they only want applications of 1,000 (or more) dwellings or receive applications from not for profit organisations.
i just bought nras home in tassie for $425,000 that returns $511 per week. and a 2 bedroom duplex for $240,000 that rents for $390!!.
Not many many people lknow Hobart has the best capital growth of all capital cities in Aus in last decade!!! and was #2 last year.
Hi Bluegrass, Kane, KY, wuzziemoo and everyone else.
I googled NRAS and was led to this forum. I have read all you have posted and have learned alot. Thank you! I got a Real estate booklet and the NRAS ad caught my eye. It says
NRAS Approved Investmenst
These investment packages are cash positive (after-tax) from day one.
Tenant – Tax refund and credits – pay all the bills
Lowood From $335,696 up to $100 pw* (and they've listed a bunch of other properties)
* Cash Positive after tax 31.5 margin rateFrom this ad, how is this all sounding to you guys so far? I'm new to this so any help or suggestions you could give me would be greatly appreciated.
Kelly
Hi all, well done on a lot of the information on this post re the NRAS initiative.
Wuzziemoo and Deeo I know it has been a while since you have originally posted that “you were looking for an Adelaide company that may be able to assist you with NRAS”, I work for a company called Investa Solutions. We are based in Adelaide but I do deal with clients all over the country, I am happy to catch up with you and discuss the pro’s and con’s of adding a NRAS to your Property portfolio.
I believe the initiative allows the investor to have the best of both worlds, passive income from day1 and capital growth as you would get with out the scheme. I am currently building in Bendigo as I believe there is strong capital growth in the area, as a bonus we have been able to have a NRAS initiative placed on the property which will make it strongly cash flowed from day 1. The key point is you are happy with the area with or with out NRAS, if you can have it also it is just a bonus.I agree with some posts that NRAS does not guarantee all investments will be a profitable one, there are some properties that have been over priced due to having the NRAS initiative on them. What I like is that you can still build in what you think is a high growth area and have the opportunity to have the initiative provide you with cash flow, best of both worlds in my book.
The talk of the scheme being targeted at low income earners is wrong, as is the thought of not being able to sell the property with in the 10 yrs with the contract attached.
Let me know if you would like to discuss more.Hi Kelly,
As I mentioned before make sure you are happy to buy this investment property with out the NRAS scheme, check comparable properties for pricing and rental demand in the area. Always be careful when the price is quotes as “From 335696” and “up to 100pw” Your individual circumstances may change these figures dramatically, ask what else needs to be done before the property can have a tenant move in. We use a specific check list for all our builders to ensure the property is full turn key on settlement.Let me know if you would like me to send you a copy of this list. The tenant should be able to move in once the property is completed, eg window furnishings, light fixings etc.
If you are happy after completing your research then the NRAS scheme can be a sweetener for you,keep in mind you will have to rent the property out 20-25% below market rent. You will have to fund this shortfall until you receive the first incentive from the government, ensure you can do this.Hope this helps,
all the best
PaulIf the government changes policy who is liable … the sales person or the government … I believe this is a very risky investment … risk means u have no control … never trust a government because u can’t sue them …
Philip Sigglekow
LREA authorTownsville houses recommended on NRAS deal due to vibrant economy, growing population and likelihood of Townsville becoming admin centre. ie. good CG prospects as well as reliable rent/tax breaks. Defence housing with less management cost (still high due to compliance requirments) . Avoid units due to approx 6 month overhang at time of posting. PM me for details
Graeme Freer | Freer Property and Finance
http://www.freerpropertyandfinance.com
Email Me | Phone MeBuyers Agent
Hey Guys,
I see lots of discussion on the dollars over ten years…..
Your assumption is that you will get what you paid for? Right?
But if your NRAS investment property is devalued by the builder who is approved to build the property…. by simply plutting the cheapest stuff he can find in your NRAS investment property, and the estimates are between 30-50k in my case…. then how is that a good investment?
My builder is large and has refused to even discuss any of the issues that they have created.
The contract was not worth the paper it was written on.
Just be very aware that their are some builders that are part of this scheeme who will see this as a government sanctioned program to rip you off, in my view, and they will!
Cheers
You must be logged in to reply to this topic. If you don't have an account, you can register here.
