In 0.17 Al 0.83 N, lattice matched to GaN, is an attractive solution for applications such as high electron mobility transistors, distributed Bragg reflectors, or light-emitting diodes. It has been reported that InAlN layers lattice matched to GaN on growth along the [0001] exhibit crystallographic degradation when the thickness is increased. In our recent work, it was shown, through theoretical modelling as well as transmission electron microscopy, that the N vacancy (V N) plays a critical role in this behavior. In this work, we have carried out a detailed theoretical investigation of the possible modification of the properties of this alloy as brought about by the presence of the nitrogen vacancy and the associated formation of the indium rich regions. After testing the ab initio procedures on the AlN and reproducing the lattice parameters and band gap with high accuracy, it is shown that the indium aggregation in InAlN leads to a reduction of the band gap. In contrast to AlN, where acceptor levels can also form, the combination of the nitrogen vacancy and the favored indium aggregation introduced even more levels at the top of the band gap, moreover examining the whole spin configuration we find a strong asymmetry in the occupation of the spin up and down states with a net moment of around 1 µB per supercell. Most importantly, the presence of a nitrogen vacancy changes significantly the top of the band gap: first, the band edges become very sharp, and second, the introduced states originating from local deformation are occupied. This leads to n type doping of the alloy and nicely agree with the use of Ti for generation of N vacancies in the technology of ohmic contacts on nitride materials. *Manuscript Click here to download Manuscript: CompMaterialSciencerevised2.docx Click here to view linked References