The End of the NRAS Period in Victoria: What It Means for Property Investors

The National Rental Affordability Scheme (NRAS), an Australian Government initiative designed to stimulate affordable rental housing, is now coming to an end in Victoria, with all currently allocated properties exiting the scheme by 30 June 2026. With this date fast approaching, property investors are faced with the decision as to how to best transition their properties out of the NRAS.

NRAS, which was first introduced in 2008, provided financial incentives to investors in exchange for the properties being rented to eligible low-to moderate income tenants at a rate of at least 20% below the market value rent. These incentives for property investors will no longer be available when the properties exit the scheme in 2026.

If you are a property investor with a property exiting NRAS, here’s what you need to know:

1. End of Financial Incentives

Investors will no longer receive the NRAS tax offsets and payments, which may impact the financial viability of continuing to rent properties at reduced rates.

2. Decisions About Future Use

Property investors must decide whether to:

• Continue to rent the property, without the financial incentives (noting the rent will not be able to be increased to market rate until the lease expires);

• Transition the property to the open rental market at standard market rental rates; or

• Explore alternative options, such as selling, partnering with a community housing provider or redeveloping the property.

3. Government Focus on Affordable Housing

The Victorian Government has stated the importance of retaining these properties as affordable or social housing to address the current housing crisis and has indicated it will work with the Federal Government, community housing providers and renter advocates in this respect. Whilst no formal plan has been announced, we expect that as 30 June 2026 draws closer, the Victorian Government will provide more clarity as to how it aims to retain the properties as affordable or social housing.

How We Can Help You

At Harwood Andrews, we have an experienced Social and Affordable housing team who can help community housing providers and property investors navigate their options in transitioning out of NRAS.

Briget O’Callaghan
Principal Lawyer
T  03 5225 5244 | M 0436 456 144
E  bocallaghan@ha.legal

Evelyn Zeglinas
Associate
T  03 5225 5245
E  ezeglinas@ha.legal