The National Rental Affordability Scheme is the ONLY Australian Government tax incentive that gives you cash back in your pocket. Combined incentives from Federal and State Governments amount to over $90,000 in tax credits. Tax credits are actually paid to you if not used unlike tax deductions. The beauty of the NRAS scheme for investors though, is that you get both.

Australian Residential Real Estate is a proven long term investment supported by substantial income tax deductions. Property investors typically negatively gear a property to get the maximum deduction. In essence the property must run at a loss from an income point of view in order to generate most of the deductions (depreciation being the main exception). Your cash-flow has to support the mortgage payments and you get tax deductions on any shortfall between rent and interest payment. Now the National Rental Assistance Scheme gives you an additional $90,000+ over 10 years as tax credits.

The National Rental Affordability Scheme or NRAS, was launched in July 2008 by Australian Treasurer Wayne Swann along with Housing Minister Tanya Plibersek. The program creates a new category of investment property which in many cases can be income neutral or positively geared. NRAS property is fully freehold owned by an investor, but benefits from being approved by the Government Agents for rental to qualifying families at a reduced rent (less 25% in Queensland) in return for significant annual tax credits and a ten year membership of the program. The governments aim is to deliver 50,000 rental dwellings over four years nationally that can be rented by qualifying families at a reduced rent. It is estimated by the Government that over 1.5 million households will be eligible for tenancies under the NRAS program, giving the property purchasers a high level of secure rental demand.

Many investors, particularly those on high incomes will find that investment in approved NRAS properties is income positive. This means that the rental income earned plus the tax credit and allowing for tax deductible property depreciation, the investment actually returns more to the investor than he/she pays out in interest payments. Being freehold property, investors will enjoy the same level of capital gains as any other comparable property in the same market.

In 2010 the combined Federal and State government NRAS tax credits amount to $9,140 per property and the amount is adjusted for CPI increases over the 10 year life of the scheme. That amounts to $91,400 in Tax Credits the governments will contribute to a property that you own. Note that these are credits which are far more valuable than tax deductions.

An NRAS property must be approved as such prior to construction. To invest in an NRAS property you should contact an NRAS strategic alliance partner with access to properties of all types and who can advise you on the best investment strategy for you. All of the normal guides and caveats still apply when investing in NRAS properties so you do need to get expert advice. A good place to start is [http://www.nras-property.com.au]