What is the ‘NDIS’?
The ‘NDIS,’ or National Disability Insurance Scheme, is a comprehensive initiative established by the Australian Government to provide dedicated support to individuals with disabilities. This program offers customized support packages tailored to the unique needs of each participant. Its overarching goal is to empower individuals with disabilities, either by facilitating independent living or by placing them in more suitable housing arrangements.
The Purpose of the ‘NDIS’
The fundamental purpose of the NDIS is to provide vital assistance to individuals who grapple with permanent and severe disabilities that significantly impact their capacity to engage in everyday activities.
Within the framework of the NDIS, there is a specific facet known as Disability Accommodation (SDA). This component focuses on creating specialized housing options for individuals with severe functional impairments or those requiring substantial support. These SDA residences incorporate specialized features designed to enhance residents’ independence and security.
Under the NDIS, the government enters into house lease agreements spanning 20 to 30 years with qualified property owners. These arrangements encompass a rental fee of approximately 95,000AUD per year (refer to program details below for further information).
Features of ‘NDIS’ Housing
Homes under the ‘NDIS’ housing program are constructed with meticulous attention to detail, surpassing standard housing standards to cater to the specific needs of individuals with disabilities. These homes offer a range of carefully considered features to enhance the quality of life for their occupants:
- Ample Ceiling Height: The house boasts a generous ceiling height of 2700mm, providing a spacious and open environment.
- Modern Kitchen Appliances: Equipped with stainless steel household appliances, the kitchen is designed for convenience and durability.
- Dishwasher: A dishwasher is included, simplifying daily chores and improving overall comfort.
- Premium Flooring: High-quality, anti-slip flooring is installed throughout the residence, ensuring safety and ease of movement.
- Accessibility: Bathrooms, bedrooms, and doors adhere to NDIS compliance standards, ensuring accessibility and ease of use for all occupants.
- Illumination: Full downlighting brightens every corner of the home, promoting a well-lit and welcoming atmosphere.
- Communication Systems: An internal communication system is integrated, allowing for seamless connectivity and convenience.
- Climate Control: Enjoy year-round comfort with a split system unit for efficient air conditioning and heating.
- Natural Light: Transparent tempered glass with window coating maximizes natural light while maintaining privacy.
- Garage Convenience: Remote garage doors, organized by zones, enhance ease of access and security.
- Landscaping: The property adheres to front landscaping and rear fence guidelines, creating an aesthetically pleasing outdoor environment.
- Additional Amenities: Mailboxes and clotheslines are thoughtfully provided for added convenience, and a diesel generator with backup battery ensures uninterrupted power supply.
These features collectively contribute to the overall quality and functionality of ‘NDIS’ housing, supporting a higher standard of living for individuals with disabilities.
What Do Investors Gain by Investing in ‘NDIS’?
Investors who choose to invest in ‘NDIS’ qualified housing and lease it to the Australian government can reap numerous advantages. Here are the key benefits that investors can expect:
Safety and Security
Investors can enjoy a high degree of safety thanks to the rental contract signed with the Australian government, providing a reliable income source.
Stability
The total lease term extends up to 30 years. Initially, the rental period in the first contract spans 20 years, and thereafter, homeowners have the option to extend for an additional 10 years or not, providing long-term stability.
Capital Preservation
Even after leasing, the property and land remain owned by the investor. Should an investor decide to sell the property, the Australian government holds the priority to repurchase it at the prevailing market price, preserving capital.
Attractive Returns
Investors benefit from attractive rental rates with two options:
-
- Flexible Package: Approximately 95,000AUD per year, equivalent to an annual return of 8-12%. In the event of occupancy disruptions, the government pays rent at the market rate of 450AUD per week.
- Fixed Package: Around 48,000AUD per year, equivalent to a 5% annual return (still exceeding typical housing rental rates in the same area).
- Rents increase by 1% annually.
Capital Growth
The investment also offers the potential for capital growth, ranging from 5% to 7% per year, varying by region.
Effortless Management
Managing your ‘NDIS’ investment is a breeze, thanks to streamlined processes:
-
- Property Management: A trusted third-party takes care of property management tasks, including government contract negotiations, tenant placement, repairs, and rent collection. This service incurs a modest fee of just 8% of the annual rent.
- Maintenance Coverage: Ongoing interior and exterior maintenance are fully covered throughout the rental period, alleviating concerns about property upkeep.
- Prompt Repairs: Any necessary internal and external repairs are promptly addressed by the management team during the rental period, ensuring the property’s integrity is maintained.
Cost Exemptions/Reductions
Investing in ‘NDIS’ comes with financial benefits:
- Council Rates & Insurance: While leasing to the government, the investor is relieved of the responsibility for Council rates and insurance as the government assumes these costs.
- Utility Bills: All utility bills related to your investment, such as electricity, water, and internet, are fully covered, relieving you of these expenses.
- Tax Deductions: House depreciation expenses can be calculated and utilized to deduct personal income tax, potentially reducing your tax burden.
Taxation and Financing
Navigating taxes and loans is straightforward:
- Foreign Investors: Foreign investors purchasing the ‘NDIS’ house project before construction only need to pay a 13.5% tax on the land purchase price, along with the FIRB application fee.
- PRs and Australian Citizens: Permanent residents (PRs) and Australian citizens can secure loans covering approximately 60% of the funds required to purchase land for building an ‘NDIS’ house.
- Low Deposit: For ‘NDIS’ investors buying a completed house, a minimal deposit of just 10% of the house and land fee is required, making the investment more accessible.
In summary, ‘NDIS’ investments offer a hassle-free management experience, financial advantages through cost exemptions and tax deductions, and investor-friendly tax rates and financing options.
