NSW Coalition proposes cuts to ‘crippling' fees on housing construction in budget reply
The New South Wales opposition will call for cuts to levies that add to the cost of building homes in the state and likely propose changing government fees to try to improve the viability of major residential projects.
A $12,000 Housing and Productivity Contribution was introduced in May 2023 soon after the Minns Labor government was elected, replacing the previous Special Infrastructure Contribution, which applied to specific development zones.
The $12,000 fee per unit or housing lot is very unpopular with developers, as it is payable at the start of a project when a construction certificate is issued, making it a significant early expense.
The opposition leader, Mark Speakman, said he would outline a plan to lower housing costs when he gives his budget reply on Thursday.
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'It's a yet another impost that forms part of the record state government taxes and charges that are crippling housing development in New South Wales,' he said.
Speakman said easing taxes and charges will be a theme in his budget reply.
The 2025-26 NSW budget, delivered on Tuesday by the Minns government, included new measures to assist developers, including a new scheme whereby the government would use its balance sheet to guarantee to buy at the presale stage up to 5000 homes.
'I think they would be better to just focus on the level of taxes and charges, and also the timing,' Speakman said. 'The Housing and Productivity Contribution is imposed when [developers] get a construction certificate. It would help developers' cashflows … if there were to be such a tax that it's done at the occupation certificate stage.'
The industry had identified financing mid-rise projects as a challenge, he said.
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Labor argues that a guarantee by the state government to purchase about 30% of the units in a development should help convince banks to lend.
If the units do not sell, the government would acquire them for affordable housing on completion under the scheme.
The forecasts revealed that the Minns government is on track to construct about 240,000 dwellings over the five years to 2028-29 – well short of the 377,000 NSW was tasked to build as part of the National Housing Accord, announced by Anthony Albanese in 2023.
Tuesday's budget noted that the lead times between approvals and completions in NSW is now two years for houses and three years for apartments.
Asked about the low figure, the premier, Chris Minns, said further changes to the planning laws and zoning changes planned by the government would boost the number of homes and it was too early to say that NSW would miss its target.
'I am hoping for bipartisan support, Minns said. 'But I suspect the nimby wing of the Liberal party will intervene,' he said, singling out the shadow attorney general and MP for Wahroonga, Alistair Heskens.
Wahroonga, on Sydney's upper north shore, is slated for several low to mid-rise development areas under the government's Transport Oriented Development zones.
Heskens has warned the TODs 'will dramatically increase local congestion'.
Speakman said they had held meetings with the government over the reforms and that these had been constructive.
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