The Rudd Government will introduce a transitional safety net to cover charities looking to participate in the National Rental Affordability Scheme (NRAS).
NRAS is a key component of the Rudd Government's $2.2 billion affordable housing package, which will boost rental stocks, help people save for their first home and lower housing infrastructure costs for some entry level housing.
We understand that many people have found rent costs increasingly difficult to meet because of the shortage of affordable rental stock.
The Rudd Government is taking decisive action on the issue of rental affordability, which is why we are acting to make participation in the scheme as broad as possible. A key component of this is to work closely with charitable organisations to encourage their participation in the scheme.
Delivering on an election commitment, NRAS will help build up to 50,000 new rental properties across Australia at a cost of $623 million in the first four years.
If market demand remains strong, another 50,000 incentives for a further 50,000 affordable rental dwellings will be made available over five years from July 2012.
To ensure that the charitable sector can participate fully in the scheme, the Australian Government will introduce a transitional safety net by amending both charity and tax laws. The amendment will mean that the proposed participation of existing charities in the Establishment Phase of NRAS will not affect their charitable status.
To ensure that charitable tax concessions remain appropriately targeted, the Government considers that the safety net should apply to those charities that make applications for 11,000 incentives available in the Establishment Phase of NRAS - for projects that will be built in 2008-09 and 2009/10 of the Scheme. The safety net will expire at the conclusion of the Establishment Phase.
The Government is committed to reviewing the Scheme at the end of the Establishment Phase to ensure it continues to meet its twin objectives: to reduce rental stress and increase the supply of affordable rental housing.
NRAS rental properties will cost 20 per cent below market rate and up to 1.5 million households will be eligible to be tenants under the Scheme - including aged pensioners and key workers.