Fight brews over NSW first-home buyers' scheme reform
A NSW government proposal to reform first-home buyer subsidies that would exempt the majority from paying stamp duty is already on shaky ground.
Premier Chris Minns says the new system will be fairer, simpler and mean five out of every six first-home buyers will pay no tax or a reduced rate.
"This is just part of the jigsaw puzzle of reforms that we're bringing in as part of what we acknowledge is a housing crisis in NSW," he told reporters on Monday.
But when asked if he was confident the bill would pass parliament, Mr Minns was unsure.
"I wouldn't say I'm confident but we've had great conversations with cross benches in the upper and lower house," he said.
Labor will need support from two crossbenchers in the lower house and six in the upper house to pass its proposed changes.
The coalition government's first home buyer choice initiative will end in July, stopping those buying property up to $1.5 million from choosing between paying stamp duty up-front or an annual land tax.
An average of 1200 people per month have taken up the scheme since it was introduced in November.
Labor's proposed stamp duty exemptions and concessions would cut the stamp duty bill on an $800,000 property from $31,090 to zero and ensure some reduction applies to homes valued up to $1m.
Mr Minns said 84 per cent of first-home buyers in NSW buy a property for less than $1m.
With half the properties in the state costing $800,000 or less, the new scheme would ensure those first-time buyers "pay absolutely no stamp duty at all".
First-time buyers in western Sydney, where two-thirds of properties cost less than $1m, would also pay a reduced stamp duty.
Treasurer Daniel Mookhey said since January about 4800 people had chosen to pay annual land tax and more than 6000 first-home buyers received a stamp duty waiver or at a reduced rate, under the existing concessions.
Labor's scheme was "far more targeted to those first-home buyers most at risk of being pushed out of the market altogether as interest rates rise", he said.
Mr Minns said under the current scheme 52 per cent of tax concessions went to just 13 per cent of first-time buyers.
"We've made a deliberate decision to ensure that this benefit is applied to a vast greater number of people than the existing scheme," he said.
The legislation to be introduced to parliament this week would also double the residency requirement to 12 months, making it harder for investors to benefit.
The biggest losers will be those buying homes worth nearly $1.5m, who won't be able to avoid a stamp duty bill of up to $66,700.
The land tax choice model disproportionately benefited those buying properties at the top end of the scheme, the government said.
The coalition says it will oppose modifications to its choice program, which allows property owners to pay $400 plus 0.3 per cent of their property's land value as an annual fee.
Liberal shadow treasurer and former finance minister Damien Tudehope criticised Labor's proposal, saying it would remove the choice for first-home buyers and put them "two years behind" in saving for stamp duty.
"It is backward-looking to reintroduce stamp duty as the only way that we can have proper property tax reform in this state," he said, urging the crossbench to support the coalition and oppose the bill in parliament this week.
CPA Australia senior tax policy manager Elinor Kasapidis said it was pleasing to see the stamp duty thresholds increased but stressed the organisation "wants governments to move away from inefficient taxes like stamp duty".
"There is widespread agreement among tax experts and professionals that stamp duty should be replaced with a smaller, annual fee for all home buyers."