SMSF promoters have started another campaign to draw in investors. This time they are telling clients that they can receive '$100,000 tax free' by using their super to buy a property through the National Rental Affordability Scheme (NRAS).
The ads fail to tell consumers that:
Eligibility to participate in the scheme is subject to restrictions
To receive a total financial incentive of $100,000, consumers will need to remain in the scheme for 10 years
They will be required to rent out the NRAS property at 20% below the market value to eligible tenants
There are fees associated with purchasing, tenanting and managing properties purchased from NRAS-approved participants
Individual investors can access the scheme through an approved participant. The Department of Social Services publishes monthly reports on its website which contain the names of NRAS-approved participants. There were 136 approved participants at the time of the latest monthly report.
However, they should be aware that:
If you are considrequirement ering purchasing an NRAS property through an approved participant, there is no for the incentives to be passed on by the approved participants to you
The payment of the incentive to the approved participant is dependent on compliance with specific conditions
ASIC Commissioner Greg Tanzer said, “Consumers need to be cautious when presented with claims which appear too good to be true and should do their research before investing. Consumers should think carefully about how long they intend to hold the NRAS property, ensure that they understand the income and capital potential of an NRAS property and satisfy themselves that it fits with their investment purpose.”
The DSS released a statement saying that the government does not authorise or register individuals or organisations to speak to members of the public about NRAS investment.