The Australian Greens have welcomed a change of heart from the tax office which will increase access to affordable housing for thousands of Australians, in response to pressure from the community housing sector and the Australian Greens.

"An adverse ruling from the ATO would have meant that community organisations participating in the National Rental Affordability Scheme would have lost their tax exempt status, jeopardising the viability of the whole scheme."

"The Greens wrote to the Treasurer requesting an intervention and I'm pleased that common sense has prevailed and the ATO has changed its position," said the Greens Housing Spokesperson, Senator Scott Ludlam.

The National Rental Affordability Scheme (NRAS) faced an uncertain future last week, after a string of adverse rulings from the ATO. The ATO had warned that community organisations participating in the scheme could lose their tax exempt status.

"The Treasurer's announcement of a Transitional Safety Net this afternoon goes some way toward a solution. The government needs to move urgently now to secure the future of NRAS."

"This is a good stop-gap solution for now, but the government still needs to find a solution for the long term. If the plan is going to be viable two or three years down the track then a legislative response will be required," said Senator Ludlam.

Senator Ludlam says further improvements to the scheme can also be made:

"I have proposed simple changes to the regulations to ensure that this housing is environmentally sustainable, providing a long-term affordability benefit as oil, electricity and water prices rise."

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