National Rental Affordability Scheme Amendment (Investor Protection) Regulations 2017 (Cth)
The National Rental Affordability Scheme Amendment (Investor Protection) Regulations 2017 (Cth) (the Amending Regulations) which amended the National Rental Affordability Scheme Regulations 2008 (Cth) (the Regulations) commenced on 18 November 2017.
The primary purpose of the Amending Regulations is to create protections for investors of rental dwellings in the National Rental Affordability Scheme (NRAS).
It is thought that through the protection of such investors, rental housing affordability will be promoted by ensuring that such dwellings are not withdrawn from the NRAS.
New obligations in relation to incentives
Organisations that are approved participants for approved rental dwellings (approved participants) should be aware that the Amending Regulations have introduced regulation 30A to the Regulations, which sets out an approved participant’s obligation to an investor for an approved rental dwelling in respect of which the approved participant receives an incentive. More specifically, regulation 30A provides that an approved participant is required to pass on an incentive to an investor if, under a contractual arrangement with the investor, the approved participant is required:
- to make a payment to the investor in relation to the incentive; or
- to take steps to enable the investor to claim a tax offset to which the investor is entitled under the Income Tax Assessment Act 1997 (Cth) in relation to the incentive; or
- to make an election under the Income Tax Assessment Act 1997 (Cth) in relation to the incentive.
Furthermore, organisations that are approved participants should note that the newly introduced regulation 30B of the Regulations provides where an approved participant receives an incentive under regulation 29 of the Regulations for an approved rental dwelling, and the approved participant is required to pass on all or part of the incentive to an investor for the dwelling; the approved participant must now comply with that requirement within a reasonable time after receiving the incentive.
Organisations that are approved participants should ensure relevant staff are made aware of the changes discussed above and as outlined in the NATIONAL – Rental Affordability Scheme module.