But state government claims plan is flawed and won't work
NSW Opposition Leader Chris Minns has promised a solution to housing affordability if Labor wins government – the removal of stamp duty for first home buyers of properties up to $800,000, and a concession rate for properties up to $1 million.
As Labor ramps up its pitch to win voters’ support ahead of the state election in March, the party says the plan will result in 95% of NSW homebuyers paying limited to no tax on their first property.
Initial modelling by the Parliamentary Budget Office showed that within the first three years of Labor’s proposed changes, 27,700 first home buyers across the state would have completely avoided stamp duty, while another 18,800 would have paid a slashed rate. That’s 95% of all first home buyers in NSW benefitting from the policy, NSW Labor was quoted as telling the Sydney Morning Herald.
The Parliamentary Budget Office also estimated that the scheme would cost $722m over four years.
“I want more singles, couples, and families realising [the] dream [of purchasing their first home],” Minns (pictured above left) said when announcing the policy on Monday. “What I will not do is saddle first home buyers with a new, yearly tax bill that increases every year.”
But the NSW Liberal government slammed the proposal, with NSW Treasurer Matt Kean (pictured above right) calling it a “con job” and a “kick in the guts” for first home buyers, with Australian Bureau of Statistics figures showing that the average home in NSW costs $1.125m.
“What it means is that fewer first home buyers in NSW will be able to purchase their own home,” Kean said. “If you’re purchasing a property in Marsden Park for the median price in Marsden Park [above $1m] you’ll be required to pay full stamp duty of $47,450.”
Similarly in Bankstown, Kean said first home buyers purchasing a median price house above $1m would have to pay stamp duty of $45,800. He also gave examples of stamp duty of $46,000 in Sutherland and $44,000 in Camden.
“It’s only Chris Minns and Labor defending the most unfair and unpopular tax in the nation – and that is stamp duty,” he said.
“Chris Minns is kicking first home buyers and excluding them from the market – our policy gives first home buyers a choice and will enable more first home buyer to get onto that property ladder much sooner.”
Kean was referring to the NSW government’s newly approved property tax scheme, which starts on January 16. Under the First Home Buyer Choice Bill which won approval in November, first home buyers purchasing properties below $1.5m can choose between paying stamp duty upfront or as an annual property tax consisting of $400 plus 0.3% of the property’s land value.
NSW Premier Dominic Perrottet first pitched the tax scheme in an effort to help young NSW residents save, arguing that it shaved two years off the time it took for a buyer to gather a deposit for their first home.
The government’s proposal drew a mixed response from leaders in the property sector and mortgage finance industry.
Labor labelled it a “forever land tax”, claiming introduced a comprehensive land tax on NSW homes that future governments could easily increase.
“[You] have to trust this premier and all future premiers not to up the land tax rate on your family home,” Minns said. He promised to repeal the bill and replace with it Labor’s alternative scheme if the party forms government next month.
First home buyers don't need a forever land tax on their homes, they need real help - and that's what we will deliver. pic.twitter.com/UVV1JvcGZa
— Chris Minns (@ChrisMinnsMP) January 9, 2023
While NSW Premier Perrottet previously advocated scrapping stamp duty – calling it the “worst tax” – he later amended that this was not possible without Treasury assistance.
Stamp duty alone made up $14.5 billion of the state’s revenue last year, Revenue NSW reported.
The NSW Opposition’s stamp duty policy came hard on the heels of its promise to improve NSW renters’ rights to keep their pets, The Guardian reported. Similar to the rules in Victoria and Queensland, the party’s pets-in-rentals policy would allow renters to apply to keep a pet using a pet request form, which would be deemed approved if the landlord failed to act on it within 21 days.
Minns said the policy aims to reduce the number of animals surrendered to shelters because of landlords refusing to have pets on the premises.
“There are over 20,000 pets abandoned every single year and given to the RSPCA, and with increasing numbers of people having to and choosing to rent in NSW, we need to make sure there are fair and reasonable rules in place to help them,” Minns said.
Who has the better stamp duty scheme for first home buyers - Labor or the NSW government? Share your views in the comments section below
