New South Wales land tax shake-up could raise $26bn for housing

A McKell Institute report commissioned by the Community Housing Industry Association NSW (CHIA NSW), reported by Elite Agent on 4 November 2026, models land tax changes it says could raise between $25.8 billion and $26.1 billion for New South Wales housing over the next decade.

Why it matters

The report, titled Long-term Funding Options for Community Housing in NSW, is pitched as a prompt for the parties rather than a government proposal: the New South Wales Government has not adopted any of the modelled measures, and CHIA NSW is asking political parties to state their position before the next state election. McKell Institute chief executive Veronica Newman said, “Our modelling shows you could raise $26 billion over the next decade through extremely targeted changes to land tax rates.” CHIA NSW chief executive Luke Achterstraat says the sector needs a long-term investment pipeline rather than repeated short-term funding, pointing to community housing providers that the research says manage more than 67,000 homes, about a third of the state’s social housing stock, and, since 2012, have built over 9,840 homes with investment above $3.6 billion.

The numbers

Under the lead option, the general land tax rate would climb from 1.6 percent to 2 percent and the premium rate from 2 percent to 2.5 percent. A new 2.9 percent rate would apply to taxable landholdings above $50 million. The family home exemption and the $1.075 million tax-free threshold would stay as they are. Elite Agent reports that option modelled at $25.92 billion in additional revenue over the 10 years to 2035-36, against two alternative models of $26.11 billion and $25.8 billion. The report also models a 7.5 percent short-term rental levy on platforms such as Airbnb and Stayz, worth about $135 million a year, a betterment charge on rezoning-driven land value gains worth about $80 million a year, and renegotiating Commonwealth housing debt repayments worth about $270 million over four years. Newman said leasing surplus government land to community housing providers over the long term, a non-cash measure, could cut about $100,000 to $150,000 from the cost of each home.

What’s next

CHIA NSW would like the money directed into a Community Housing Enabling Fund of about $26 billion across 10 years, aimed at 50,000 social and affordable homes by 2050 built through not-for-profit providers. The lobbying lands against a social housing waiting list that stood at 72,232 households in September 2026, of which 14,155 were assessed as eligible for priority assistance, while the sector’s reported development pipeline is 7,470 homes by 2030. The New South Wales Government has already committed $6.6 billion through Building Homes for NSW, announced in the 2024-25 Budget, but none of CHIA NSW’s land tax, rental levy or betterment measures has been adopted. It follows other New South Wales housing policy moves this cycle, including underquoting penalty reforms taking effect 17 November.