The NSW government is being accused of bending to pressure from the property industry by looking to introduce tax breaks for big foreign builders.
New laws set to be debated in NSW Parliament in coming weeks would see Australian corporations with foreign ownership claim a refund of the surcharges on the sale of new homes.
The government says this would boost housing supply for NSW, but the opposition claim Premier Gladys Berejiklian is just trying to appease the property industry.
"Once again it is developers who get to call the tune here and people would have a right to ask in whose interest is the premier governing - the people of NSW or the property industry," opposition treasury spokesman Ryan Park said in a statement on Saturday.
"This isn't about housing affordability, this is about the Liberals appeasing the property industry."
The new laws, which would let overseas owned developers avoid the foreign investor surcharge and land tax when building new home in NSW, will also double the maximum completion time.
Developers would have up to 10 years to complete a project, which Labor say raises the prospect of them banking land.
"Allowing foreign property developers to land bank for 10 years is contradictory to fixing housing affordability," opposition finance spokesman Clayton Barr said in a statement.
However, NSW Treasurer Dominic Perrottet said the tax breaks would be an incentive for big developers to continue providing housing for the state.
"By having that surcharge exempt for developers who are providing new stock for NSW home owners, we think that's a good thing," Mr Perrottet told reporters.
At the last budget, the state government doubled the foreign investor surcharge from four to eight per cent, as well as increasing the land tax surcharge from 0.75 to two per cent - a move expected to raise close to $2 billion.
Ms Berejiklian pointed to the affect stamp duty exemptions for first home buyers had had on the market as proof her government was working to address Sydney's housing crisis.
The government abolished stamp duty for first time buyers on all homes up to $650,000 and gave stamp duty "relief" for homes up to $800,000.
Ms Berejiklian said almost 10,500 first home buyers purchased property since June, more than double the same time period last year.
"We are thrilled that people are taking advantage of the exemptions which are slashing the cost of purchasing their first home," Ms Berejiklian said in a statement.
