NSW Labor says new stamp duty concessions ‘fair and simpler’ for first home buyers

The Greens and independent Sydney MP Alex Greenwich will back Labor’s legislation to scrap an optional land tax for first home buyers, as NSW Treasury figures show most people who took up the plan were buying properties over $1 million.

As the new state government faces a worsening housing crisis, it will on Tuesday introduce its own stamp duty legislation, lifting exemptions for first home buyers from $650,000 to $800,000, while applying concessions on properties worth up to $1 million.

NSW Premier Chris Minns says it was not unreasonable for first home buyers to buy an apartment.Credit: Edwina Pickles

The legislation will also end former premier Dominic Perrottet’s flagship property tax legislation, which was billed as the first step in a complete overhaul of stamp duty.

While the Coalition has urged crossbenchers who supported Perrottet’s land tax to block its repeal, Labor has won support from key independent Greenwich and the Greens, which will enable it to pass the lower house.

Greenwich said he was likely to support the bill “pending a review of the legislation”.

“I especially welcome the requirement to live in the property for at least 12 months, which will help limit flipping properties for a quick profit or turning them into investment properties or short-term rentals,” Greenwich said.

The Greens Treasury spokesperson Abigail Boyd said the former government’s changes did nothing to address housing affordability.

“It was a bad policy six months ago, and it is still a bad policy,” Boyd said.

The government has argued its new exemptions are a “simpler and fairer” policy, pointing out that while almost 4800 people have opted into the land tax since it came into effect in January, the majority had been at the top end of the scale.

On Monday it released treasury modelling which showed that while only 13 per cent of first home buyers bought properties between $1 million and $1.5 million dollars in the period the land tax had been in place, they made up 52 per cent of those who had opted in.

Premier Chris Minns said it was a “lot of subsidy for people who are purchasing a property above $1 million for their first home”.

“I’ve got no problem if someone’s got the means to purchase their first property above $1.2 or $1.3 million dollars, [but] the question should be … if a subsidy is in place, it should be going to those that would ordinarily not have been able to enter the housing market,” Minns said

“So we’ve made a deliberate decision to ensure that this benefit is applied to a greater number of people than the existing scheme, and it’s really focused.”

Shadow treasurer Damien Tudehope accused the Minns government of “breaking the hearts of first home buyers”.

Tudehope said the land tax had aimed at reforming a stamp duty process “which has saddled the homebuyers of NSW for over 100 years”.

Amid Sydney’s crippling housing affordability crisis, Minns has made increasing housing supply a priority early in his term. On Monday, he conceded most first home buyers purchasing properties for less than $800,000 in Sydney’s overheated market would be buying apartments.

As the government looks to increase density in the inner-city and along transit routes, Minns said that was a positive.

“It would normally be the case that, for many first home buyers, they will purchase an apartment as their first purchase and I don’t think that’s a bad thing,” Minns said.

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