No surcharge duty to help attract more foreign investment

A NSW Government decision to waive foreign purchaser surcharge duty has been seen as a positive step to improving housing supply in the state, according to the Property Council of Australia.

From July 1, the nine per cent surcharge duty will be removed for large-scale institutional projects, like build-to-rents and retirement living developments, a move designed to attract global capital and accelerate delivery of new housing for renters and seniors. 

Property Council NSW executive director Katie Stevenson said modernising these tax settings was a practical step to restore the state’s competitiveness and attract global capital at a time when housing supply is under significant pressure. 

“This announcement provides a clear signal that NSW is serious about attracting the global capital needed to boost housing supply,” Stevenson said.

“This is a strong outcome for the Property Council and our members’ efforts over many years to advocate for more competitive tax settings to unlock the institutional investment needed to deliver housing at scale.”

Stevenson said build-to-rent and retirement living have a significant role to play in delivering much-needed housing to NSW and are particularly well suited to long-term institutional investment.  

“This reform will help unlock projects that have struggled to stack up under previous tax settings,” she said.

“It will bring them in line with other diverse housing products such as purpose-built student accommodation that are not subject to the foreign investor surcharge. 

“These are exactly the types of developments that deliver stable rental supply and meet emerging community needs — more homes for renters and more choice for older Australians. 

“Encouraging foreign investment into these sectors will help accelerate delivery while easing pressure in the broader housing market.”

Stevenson said the announcement aligns NSW more closely with other jurisdictions and reflects the growing recognition of the importance of institutional investment in addressing housing shortages. 

“This reform recognises we are competing globally for capital and that tax settings play a critical role in attracting investment,” she added.

“With the right policy settings, we can continue to build on that approach – ensuring all forms of rental housing can attract the institutional capital needed to support students, renters and key workers in our community. 

“We encourage the Government to continue working with industry to make sure these changes are well targeted, support feasibility and deliver more homes sooner.”

NSW treasurer Daniel Mookhey said the state needs more homes for renters and more housing options for older Australians.

“This budget measure is about attracting the global capital needed to help deliver them,” Mookhey said.

“We want international pension funds and other long-term investors backing the homes our growing population needs.”