National Rental Affordability Scheme (NRAS) Property Investment

The National Rental Affordability Scheme (NRAS) is funded by both the state and federal government to address the shortage of affordable rental housing to low and moderate income households at 20 per cent below market rates.  The scheme was introduced in 2008 and has shown to be a popular investment amongst the SMSF space.

The good news for SMSF trustees is investing in an NRAS property is permitted under SIS Legislation but what are the advantages and more importantly the disadvantages of such investment?


  • The main advantage is unlike business real or commercial property, NRAS property investment is typically cash flow positive and is earning you an income from the first year!
  • To compensate for the reduced rent an SMSF trustee would receive, the fund receives a combination of refundable tax offsets and non-taxable incentives.
  • The properties can be in the NRA scheme for up to 10 years but can also be removed from the scheme and sold as normal at any point during those 10 years.
  • The offsets and incentives received by the government currently amount to approx $10,661 per annum for the 10 years they are on the NRA scheme and are indexed annually. This is a flat rate regardless of the property type, value and rental income. This can boost the fund’s investment performance and retirement pool.
  • The property, like all property investments in an SMSF will only be subjected to 15% capital gains or 10% if the property is held for more than 12 months. If the asset is held whilst in pension phase, it will also be exempt from CGT.


  • You may have difficulty sourcing a lender for the purchase of an NRAS Property if you need to borrow money to fund an acquisition.
  • Management fees can be higher than that of a normal property due to the compliance aspect. It can often range from 9-11% of the weekly rental income.

Of course with any investment in your SMSF we suggest you do adequate research before making such decisions. Xpress Super are not licensed financial advisers and cannot recommend any financial product to you.

If you are looking for further information on investing in property, please read our fact sheet on buying property.