Home buyers of New South Wales will face the burden of paying more than $90 million of property tax under the provisions of the Federal Budget.

The inclusion of the property tax was quietly released late yesterday at the NSW Upper House, causing a surprise to the representatives.

The burdening additional tax is set on properties between $200 and $1000, including transfer fees for properties worth $500, 000.

Australian Property Monitors said the median Sydney house costs $595,745 in March.

Commercial investors will suffer as well as they will be paying $500,000 in extra taxes on typical CBD office space.

A 0.2 per cent and 0.25 tax will be added from the existing tax on properties between $500,000 and $1 million respectively.

A source from the federal labor said the property tax was released as the government was trying to ease fears of big-taxing labor governments while it was preparing for the election.

"That they tried to hide it under the coverage of our Budget makes it worse," the source said.

The new charge will be imposed in July, the same time as the increase of electricity cost.

Premier Kristina Keneally argued the tax would apply only to 30 per cent of all property transactions.

She added the tax will put a halt on property fraud practices.

However, the property industry condemned the new tax.

"We had absolutely no idea this was coming," Property Council NSW acting executive director Glenn Byres said yesterday.

"We have an investment climate that is poor, a 50-year low in construction levels and this hits residential and has a big impact on commercial property investment."