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The NSW government will build thousands of new homes on surplus government land to tackle housing supply, the 2024–25 budget for NSW has revealed.
The Minns Labor government handed down the NSW budget for 2024-25 yesterday (18 June) and revealed that the state has committed to delivering up to 30,000 homes that are close to transport and infrastructure.
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The government announced that surplus land will be made available for housing over the next four years and that the government’s audit to identify surplus government land has revealed 44 sites that are suitable for housing.
The locations of the site will become available over the coming weeks and months, the government has said.
The NSW government will leave the stamp duty exemption threshold for first home buyers untouched, with the property price cap remaining at $800,000 for a home and $350,000 for vacant land.
The tax-free threshold for properties subject to land tax has been frozen at $1.08 million and will no longer be indexed annually in line with property price changes. The NSW government expects that 30,000 properties would be affected immediately.
Julie Toth, PEXA’s chief economist, said: “This freezing of the threshold at $1.075 million (unimproved land value) will gradually increase the number of rental properties subject to land tax, as rising property values push them over the threshold.”
Professional accounting body CPA’s business policy adviser Gavan Ord said that it was “plausible” that the freezing of the land tax threshold could have a flow-on effect for renters if landlords pass on the increased costs.
He said: “Some [property owners] will also consider selling their investment, which would further reduce supply in the rental market.
“We’ll wait to see what impact the land tax changes will have on investment and investor confidence. It is a real concern that property tax changes are potentially making Australia’s two biggest cities less attractive for overseas investors who can pick and choose where to invest.”
Toth said: “Collectively, these incremental tax increases may reduce the attractiveness of NSW as a place to invest in property and may reduce the number of homes available for rent in the private sector.”
Planning sector reform
The state budget has allocated $253.7 million to overhaul the planning system and rebalance housing around existing infrastructure.
The funding will, according to Paul Scully, Minister for Planning and Public Spaces, fund more planners and critical staff to assess housing, infrastructure proposals, and job creation.
A further $1 million has been allocated to explore a guarantee scheme that would enable residential developers to secure funding to accelerate the completion of residential housing.
Scully said: “This budget builds on reforms already made under the Minns Labor government to streamline planning and fund infrastructure.
“This is part of the Minns Labor government’s plan to build better communities for NSW to ensure infrastructure is built alongside housing to produce better and well-serviced communities.”
Master Builder’s NSW executive director Brian Seidler welcomed the additional funding: “Build times have blown out year on year in part due to long delays in planning approvals, therefore, the measures to speed up the delivery of development approvals are greatly appreciated and will play a significant role in reducing build costs caused by such brakes on work.”
Funding for social housing
A total of $5.1 billion has been allocated to deliver 8,400 new public homes, with half of the homes to be built for victims of family and domestic abuse.
An additional $1 billion will be invested into 33,500 homes to perform critical maintenance, ensuring that these homes will be brought “back online”. Included in the investment to update social housing is $202.6 million to fund the critical maintenance program for Aboriginal Housing to repair and upgrade homes.
The government has also invested $527.6 million into emergency housing and homelessness support services to support vulnerable Australians into stable housing.
Rose Jackson, Minister for Housing and Homelessness, said on the social housing measures: “We’re investing in homelessness services and properly funding crisis accommodation so if you’re struggling, we can find you a safe place to sleep while building homes to tackle long-term homelessness.”
NSW Building Commission updates
To crack down on “dodgy builders”, the Minns Labor government has allocated $35 million to boost the Building Commission NSW to enhance its digital capabilities as it “[lifts] building standards” across Australia.
Seidler said: “We welcome additional funding for the NSW Building Commission to carry out the important work of enforcing rules and stamping out bad building practices.
“Master Builders has long supported an industry-specific building commission to ensure projects are built to the high standard the community rightly expects.”
The Queensland state budget was unveiled last week and revealed a number of housing measures and support for small- to medium-sized enterprises.
[Related: Qld budget unveils support for SMEs]
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