Money will be put aside in the state budget to go towards some stamp duty reform
Premier Dominic Perrottet insists he cannot move to replace stamp duty with land tax without federal help, but budget money has been put aside to give some buyers the option.
NSW
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First home buyers are set to benefit from a housing affordability scheme giving some buyers the choice to avoid stamp duty by paying an annual land tax instead.
While next week’s state budget will include funding to replace stamp duty with land tax for some home buyers, Premier Dominic Perrottet has insisted he cannot pursue his long-mooted reform proposal without the federal government’s help.
Mr Perrottet’s plan to gradually replace stamp duty with an annual land tax has been on the cards since 2020.
Government sources familiar with the budget process said that $900 million had been put aside in this year’s document to benefit first home buyers.
Mr Perrottet and Treasurer Matt Kean would not confirm the figure.
The Daily Telegraph understands that the money will be used to help first home buyers.
First home buyers have previously been able to get stamp duty discounts if they buy a house worth less than $800,000. Stamp duty was waived for houses costing less than $650,000. Government sources suggested next week’s budget measure could increase those thresholds to allow more people to benefit.
Mr Perrottet has consistently said that he wants to remove stamp duty, which he has described as the state’s “worst” tax.
“The reality is state governments can’t do away with stamp duty without support from the federal government,” he said on Monday.
The long-discussed proposal to replace stamp duty would only apply to new homes. If buyers opted into land tax, subsequent buyers would not be able to opt out.
Real Estate Institute of NSW CEO Tim McKibbon yesterday cautioned that replacing stamp duty with land tax would create a two-tiered market.
“Like-for-like properties, one of which will incur stamp duty and the other which will be subject to the ongoing property tax, may not be in equal demand. The prices achieved for these properties may differ because of this,” he said.
Farah Jpour and Milan Bosinjak are both looking to buy a home in Sydney but lamented that buying in the city is incredibly hard due to the high housing prices.
Mr Bosinjak, 23, said that the large upfront cost of stamp duty was “absolutely” a deterrent from entering the housing market.
“If you don’t have any generational wealth it’s almost impossible (to buy a home),” he said.
Ms Jpour, 22, agreed. “You would have to move back home to save,” she said.
“It’s hard to save such a large amount (stamp duty).”
Mr Bosinjak said he would want to “look into” paying annual land tax instead of stamp duty.
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Originally published as Money will be put aside in the state budget to go towards some stamp duty reform
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