Dwelling owners investing under a head lease agreement

We are aware of certain NRAS arrangements where a dwelling owner leases their dwelling to a housing provider under a head lease and that housing provider subleases the dwelling to eligible NRAS tenants for at least 20% below market value rent. A housing provider in this context is an approved participant under the NRAS scheme and includes charitable housing organisations.

In some circumstances, these dwelling owners may not be entitled to the NRAS refundable tax offset.

Find out more

ATO Interpretative Decision 2009/146External Link.

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From 2010-11 income year onwards, the law has been amended to allow approved participants of NRAS consortiums to relinquish their entitlement to the NRAS tax offset in favour of certain other members of their consortium where the member did not directly derive NRAS rent.

Approved participants seeking to relinquish their entitlement must elect to do so. For more information about making the election, see Election to relinquish your entitlement to the NRAS tax offset.

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If you are considering participating in the NRAS and you want certainty about the way tax applies to your particular arrangement, we recommend you apply to us for a private ruling.

Find out more

For more information if you participated in NRAS in a non-entity joint venture prior to the 2010-11 income year, refer to National rental affordability scheme - information for non-entity joint venture participants.

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    Last modified: 30 Jul 2015QC 21519