NSW Labor promises to cut stamp duty for first-home buyers in big election promise

In a major election promise, the NSW Labor Party has vowed to increase its spending cap for first-home buyers wanting to get on the property ladder.

NSW Labor has announced a huge election promise to abolish or significantly cut stamp duty for eligible first-home buyers.

Prospective homeowners won’t have to pay stamp duty at all when buying a home with a value up to $800,000, plus a significant concessional rate given to properties priced under one million. Current schemes are capped at property values of $650,000 for full stamp duty exemption and $800,000 for a discounted rate.

“I understand the stress of trying to purchase your first home. I want more singles, couples and families realising this dream,” said NSW Opposition Leader Chris Minns, who will going to the polls on March 25.

“Under Labor any property purchased under $800,000 will have absolutely no stamp duty, and any property purchased up to $1m will have a reduced rate.

“What I will not do is saddle first-home buyers with a new, yearly tax bill that increases every year.”

NSW Labor will abolish or significantly cut stamp duty for eligible first-home buyers. Picture: NCA NewsWire/ Kelly Barnes

Stamp duty rates applies to the charges involved when transferring the ownership of a property and is paid by the buyer. Using figures from the Australian Bureau of Statistics, the stamp duty of an average home (valued at $1,125,600) in NSW is roughly $46,108.

Under existing measures, the First Home Buyer Assistance Scheme waives the transfer duty on homes valued up to $650,000, with a concessional rate given to properties up to $800,000.

First-home buyers can also access a $10,000 grant for new homes under the First Home Owner’s Grant (New Homes) for properties under the value of $750,000 that have not been lived in before.

NSW Labor leader Chris Minns will be taking on Dominic Perrottet at the NSW state election on March 25. Picture: NCA NewsWire/ Damian Shaw

The NSW Labor Party suggests this applies to 95 per cent of all first-home buyers across the state.

Initial modelling done by the Parliamentary Budget Office suggests that within three years, 27,700 first-home buyers will benefit by paying no stamp duty at all, with 18,800 qualifying for the reduced rate.

The scheme has been costed at $722m, with funding for the plan taken from the government’s land tax reforms introduced in November of last year.

Libs give FHB choice between stamp duty and property fee

In November, Dominic Perrottet’s Liberal government passed the First Home Buyer Choice legislation, which gives new homeowners the choice between paying stamp duty, or an annual property fee.

While the plan was criticised for creating a “forever tax,” Mr Perrottet said the reforms would help people get into the housing market sooner.

“The great Australian dream of home ownership just got much easier for a generation of

young families,” he said.

“For the first time we will provide first home buyers with a choice, helping thousands of

people to shave around two years off the time needed to save for a deposit.”

The plan is applicable to dwellings up to the value of $1.5m or vacant land up to $800,000.

Premier Dominic Perrottet unveils the stamp duty reform. Picture: NCA NewsWire / Damian Shaw

In costing done by the NSW Treasury, a $1m property bought and resold within 10 years would incur a property fee of $19,881 compared with stamp duty of $40,909.

First-home buyers from January 16 onwards can access the scheme; however, people who’ve bought a home between November 12, 2022 and January 15, 2023 have the option to apply for a stamp duty refund.