New South Wales Budget 2025–26: Building capacity and confidence in construction
New South Wales Budget 2025–26: Building capacity and confidence in construction
The New South Wales Government has committed $40.2 million to deliver 23,000 fee-free construction apprenticeships and $13.8 million to transition more workers into residential construction. In parallel, $79 million will fund the NSW Innovation Blueprint, including $20 million for emerging housing technologies and $4 million for the Housing Innovation Network and Construction Program.
The Budget also introduces a $1 billion Presale Finance Guarantee Scheme to underwrite unsold units in approved housing projects. Under the Presale Finance Guarantee scheme, the state will guarantee the purchase of unsold units - up to $50 million per project - giving developers the confidence to begin construction sooner. This measure is expected to support the delivery of up to 15,000 new homes over the next five years.
The Budget includes an indefinite extension of land tax concessions for qualifying Build-To-Rent developments. Previously set to expire in 2039, the 50 per cent reduction in assessed land value will now be permanent. Notably, the eligibility criteria have been broadened with the removal of the specified class of worker requirement, making the concession more accessible to a wider range of projects.
What is the impact of these announcements?
These measures aim to address three critical constraints:
- Workforce shortages - The apprenticeship and transition funding will help meet growing demand for skilled labour in the medium-term.
- Productivity challenges - The innovation investment supports faster, more efficient construction methods and greater productivity.
- Project financing - The finance guarantee enables developers to commence projects earlier by reducing reliance on high pre-sale thresholds, which promotes pipeline.
The Build-To-Rent tax concession extension provides further long-term certainty for developers and investors, improving the viability of rental housing projects and encouraging more secure, high-quality housing options for New South Wales residents.
BDO Comment
The Budget’s construction-focused measures reflect a pragmatic response to industry challenges. The Presale Finance Guarantee is particularly significant as it tackles the financing bottleneck that has stalled many apartment projects. There is a clear opportunity for social and affordable housing also, with the potential for these homes to be redirected to affordable or social housing providers which presents a promising avenue for public-private collaboration.
BDO welcomes the indefinite extension of land tax concessions for Build-To-Rent developments. This move sends a strong signal to institutional investors and developers that New South Wales is committed to supporting long-term housing solutions. By removing the sunset clause and relaxing eligibility, the Government is helping to diversify the housing market and improve stability for renters.
On productivity, the Innovation Blueprint and Housing Innovation Network are welcome steps, but feasibility remains a challenge. Without parallel reforms in planning approvals and land access and support for builders, technology alone may not overcome systemic delays. Still, the Budget signals a strong intent to build smarter and faster, and the construction sector should be ready to engage.
How BDO can help
The construction sector is under huge pressure, as housing supply and affordability remain key issues affecting communities in New South Wales and across the country. Our national team of real estate and construction experts are proud to support one of Australia’s largest and most important industries, and we are attuned to the specific challenges that the construction sectors face through all stages of the construction process.
If you would like to explore our real estate and construction services, or discuss how we can help you grow and build your business, contact us today.