NSW cost-of-living bill: what the state legislature's new housing and energy package means for Sydney households

The New South Wales government's cost-of-living omnibus bill, introduced on Monday and debated through Thursday, combines three policy streams-rental reforms, energy bill relief and land tax changes-that directly affect Sydney households. The legislation, titled the Cost of Living and Household Support Amendment Act 2026, passed the Legislative Assembly 52 votes to 38 and now moves to the Legislative Council for committee review.

The bill introduces a mandatory rent increase cap of 3 per cent per annum for tenancies in Greater Sydney, in effect for two years from 1 September 2026. It also expands the Low Income Household Energy Rebate from $285 to $400 per eligible household and creates a new 'first-home buyer land tax threshold' of $650,000 for properties in the Sydney metropolitan area. According to the legislation's explanatory memorandum, the package is projected to affect roughly 340,000 Sydney renter households and 210,000 energy customers currently on the rebate scheme.

What it means for weekly household budgets

For a family renting a three-bedroom home in Western Sydney-where median weekly rent reached $630 in the June quarter 2026, according to the NSW Renters and Housing Investment Report-the 3 per cent cap translates to a maximum annual increase of about $983, compared to the uncapped 6.2 per cent average annual rise recorded in the same period. The energy rebate increase, which applies automatically to eligible customers on electricity bills from 1 October 2026, is expected to save a typical household around $115 a year. Local advocates point out that Sydney's inner-west and south-west suburbs have some of the highest rates of rental stress in the state; the Tenants' Union of NSW noted in a submission to the budget estimates that a 3 per cent cap could stabilise budgets for low-income renters in areas like Marrickville and Liverpool, though they cautioned that landlords may seek to recoup costs through higher starting rents on new leases.

The first-home buyer land tax threshold, which replaces the existing stamp duty exemption for properties under $800,000, shifts to an annual tax of $400 plus 0.3 per cent of the land value above $650,000. The government says this will help first-home buyers entering the Sydney market-where median house prices in the June quarter sat at $1.42 million, per CoreLogic data-avoid an upfront stamp duty bill that can exceed $50,000, instead paying a smaller recurring tax. Critics, including the Property Council of Australia, have argued the tax will add to long-term ownership costs, but Treasury modelling cited in the bill suggests average annual savings of $2,100 in the first five years for eligible buyers compared to the current stamp duty regime.

Next steps and political context

The bill will be examined by the Legislative Council's Standing Committee on State Development, which is scheduled to hold hearings in late July and report by 21 August. Amendments could alter the rental cap's duration or the rebate eligibility criteria. With the government holding 25 of 42 seats in the upper house, passage is expected, but crossbench concerns over enforcement of the rental cap-the bill assigns compliance to Fair Trading NSW, which currently employs 40 inspectors for the entire state-remain a point of debate. The committee's chair, independent MLC Dr. Abigail Boyd, has flagged that the cap's effectiveness will depend on how many inspections are actually conducted.

For Sydney residents, the immediate effect will be visible on energy bills from October and on rent notices from September. The Treasury estimates the package will reduce the household cost-of-living index for Sydney by 0.4 percentage points in the 2026-27 financial year. The bill is expected to gain assent by early September, just ahead of the start of the spring rental cycle.