There are claims thousands of struggling families will benefit if there is an influx of "granny flats" being built across Sydney.
The Government is trying to convince local Councils to approve more of the "secondary dwellings" in a bid to ease the state's rental crisi, however the plan would also need the backing of the Federal government.
Under the proposal by the State government, those who take up the initiative won't be charged capital gains tax.
Accountant Anthony Bell has told 2GB's Chris Smith, it is a commonwealth matter and he can't remember a State government ever convincing it's Federal counterpart to make amendments.
"Not in my recollection and I'm almost somewhat surprised as to the precedent that it would set if they actually did go about making a NSW only jurisdiction for this."
Premier Morris Iemma says "granny flats" offer real hope to young people struggling under the high cost of rent.
"It's one potential solution. We're cutting taxes, increasing the supply of land, making it more attractive for first home buyers to buy their own home - for example, by abolishing stamp duty.
"This is one potential measure and already families in cities like Parramatta have benefited from this."