Image: NSW Labor leader Chris Minns. Photo: Facebook/Chris Minns
By CHRISTINE LAI
The New South Wales Labor Government has vowed to abolish stamp duty for some first home buyers and reducing the rate of tax for other purchases. Labor’s plan will see the removal of stamp duty for first home buyers that purchase properties worth up to $800 000, pending their win of the upcoming state election in March.
First-home buyers purchasing properties up to $1,000,000 will also be offered a discount according to Labor’s proposal.
The pledge to eliminate stamp duty is a response to the Perrottet government which announced tax changes that passed through parliament in November last year. This change offers first home buyers of properties under $1.5m the option to choose between paying stamp duty upfront or at an annual rate of $400 property tax plus 0.3% of the property’s land value.
According to Perrottet, the land tax option would help young people save for a deposit, shaving off the time needed to come up with the finances to fund a first-home purchase.
“The great Australian dream of home ownership just got much easier for a generation of young families,” Mr Perrottet said. “People can now save huge sums of money on the biggest purchase of their life.”
Labor criticises “forever tax” for first home buyers
However, the Labor government has called Perrottet’s stamp duty reform dream a “forever tax” for families purchasing their first home.
Shadow treasurer Daniel Mookhey criticised the Premier’s plan, stating that Perrottet has been “obsessed with introducing a land tax for years.”
“His plan is to say what he must to get through the election, before he charges full-steam ahead and introduces a broad-based land tax. The fact that Mr Perrottet has again refused to rule-out extending his land tax even further shows that he will never give up on the plan he spent years fighting for”, Mookhey said in a statement as reported by Sky News.
According to the Australian Bureau of Statistics (ABS), the number of new loan commitments by first home buyers in NSW has halved since the most recent peak in December 2020.
Labor has also indicated that according to the Parliamentary Budget Office assessment, the proposed policy would cost no more than $722 million over three years.
The offer will only apply to new and existing homes, not vacant land.
Labor has used independent modelling by the Parliamentary Budget Office to declare that within the first three years of Labor’s changes, the scheme will cover 27,700 first home buyers and an additional 18,800 first home buyers will pay a discounted rate.
