Investing in affordable rental housing

Affordable housing is where residential accommodation is provided on rent to people whose household income is not high enough to cover market rental prices in the area they live or work.

Under the affordable housing scheme, property owners, property developers, organisations and governments offer residential accommodation for rent below market rental prices.

If you rent out your investment property under the affordable housing scheme, you

• need to declare your rental income
• can claim rental expenses as a deduction.

The rules are generally the same as investing in residential rental properties.

There are different rules if you rent out your property through the National Rental Affordability Scheme (NRAS).

An additional 10% capital gains tax (CGT) discount may be available when you sell an Australian residential rental property you used to provide affordable housing.