New South Wales State Budget 2025-26 - Housing reform and investment targets supply and stability
New South Wales State Budget 2025-26 - Housing reform and investment targets supply and stability
New South Wales Treasurer Daniel Moohkey has handed down the 2025-26 New South Wales State Budget. Emphasis was placed on the provision of affordable housing for renters and the vulnerable, Western Sydney infrastructure, and investment in education, health, policing, and the arts.
The budget also includes significant investments aimed at kick-starting business investment and growth across the state. The New South Wales Government will set up a new Investment Delivery Authority with $17.7 million to help fast-track major projects like tech hubs, clean energy sites, hotels, data centres, and commercial buildings. Cybersecurity is another critical area, with $125.8 million allocated to future-proof the NSW Police Force’s cyber systems.
The budget reinforces the Government’s focus on housing supply by stimulating development of new homes and encouraging developers, both local and foreign, to engage in Build-To-Rent projects.
Government announces Pre-Sale Finance Guarantee program
The Government has announced a Pre-Sale Finance Guarantee program to support increased housing developments by guaranteeing to purchase unsold stock from developers up to a value of $50 million per development. This provides developers with support to commence projects earlier and is intended to add up to 15,000 new homes over the next 5 years.
BDO Comment
The program is designed to address a key barrier in apartment construction. Developers often encounter challenges securing finance unless they can pre-sell a significant portion of units. BDO welcomes this program as it should provide developers greater confidence around funding to help projects get off the ground sooner.
Extension of tax concessions for Build-to-Rent developments
The New South Wales Government will indefinitely extend land tax concessions for eligible new build-to-rent developments. Previously set to expire in 2039, the 50 per cent reduction in assessed land value will now be permanent. The measure is designed to improve the financial viability of long-term rental housing projects across the state. Furthermore, eligibility criteria to access the concession has been relaxed with the removal of the specified class of worker.
This change provides long-term certainty for investors and developers, making build-to-rent projects more attractive and feasible. It is expected to boost the supply of secure, high-quality rental housing, offering more stable lease options and greater housing choice for renters across different life stages in New South Wales.
BDO Comment
BDO welcomes the indefinite extension of land tax concession, a move that aligns with broader efforts to address housing affordability and supply. By removing the 2039 sunset clause, the Government is sending a strong signal to institutional investors and developers that New South Wales is committed to supporting long-term rental housing. This policy supports a more diversified housing market, benefiting families, key workers, and younger Australians seeking stability in a challenging rental environment.
Continuing investment in compliance
The Government is allocating additional investments to the operation of Revenue NSW’s compliance systems. This investment will no doubt increase state tax revenue more broadly.
BDO Comment
BDO welcomes the increase in compliance expenditures to ensure taxpayers are correctly complying with the relevant laws and understand how certain laws apply to their business. Taxpayers need to be more vigilant to ensure they are up to date with any changes to their tax obligations, given that Revenue NSW is likely to be more proactive and step up reviewing activity.
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