Coalition ‘Thinks Big’ in New South Wales Land Tax Reform

The premier of Australia’s most populated state New South Wales (NSW), says he is focused on creating “policies for the next generation” as he launches a major overhaul of tax settings for first-home buyers in the state.

“We need to think big, do things differently and deliver new policies to drive NSW forward,” Dominic Perrottet wrote in an opinion piece in the Sydney Morning Herald on Monday.

“I want to create policies for the next generation, not the next election.”

The government’s First Home Buyers Choice scheme gives those purchasing a property under $1.5 million (US$1 million) a choice between paying a one-off lump sum stamp duty payment or an annual land tax.

Perrottet, who has long been open about his disdain for stamp duty, passed the reform through parliament last year.

The premier, and Treasurer Matt Kean, will launch First Home Buyer Choice in southwest Sydney on Monday.

However, Labor on Monday criticised the policy as a broad-based “forever tax” on the family home and has countered with their own policy, lifting an existing tax-free threshold for first-home buyers to homes and apartments that are priced up to $800,000.

According to the Australian Bureau of Statistics, the current median price of a house in NSW is well above the Labor cut-off, coming in at $1,125,600.

Stamp duty would also be partly waived for first-home buyers purchasing homes up to $1 million under Labor’s plan.

With the issue likely to become an election issue, Shadow Treasurer Daniel Mookhey said Labor had delivered better policy for first-home buyers.

“With real wages falling, interest rates rising, and tolls exploding, an annual land tax payment will further punish household budgets,” Mookhey said.

“We have the better plan. Tens of thousands of first home buyers get a tax cut,” he added.

“No one will need to worry about us imposing an annual land tax on their home, which could last forever.”

Modelling for the Parliamentary Budget Office estimates about 95 percent of first home buyers, or 46,000 people, would be able to access full or partial waivers under Labor’s expanded scheme.

This would cost $733 million over the first three years.

An estimated 30,000 to 46,000 people get relief under the existing program.