Radical change to stamp duty in one Australian state kicks in TODAY – here’s everything you need to know
The NSW premier 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 a choice between paying a one off lump sum stamp duty payment, or an annual land tax.
Homebuyers in NSW will no longer have to pay thousands of dollars in stamp duty upfront. Pictured: Bondi Beach
Instead of paying the stamp duty fee up front buyers could chose to pay an annual land tax to the state government instead. Pictured: A home auction in Sydney
What is stamp duty?
Stamp duty is a tax paid to the state government by the buyer when purchasing a home
The figure depends on the value of the home but the median average stamp duty in Sydney is $49,934
First home buyers can qualify for a stamp duty exemption for homes they buy for less than $650,000 while a concessional rate is available for properties worth up to $800,000
The rule applies whether the home is brand new or existing
Mr 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.
Labor on Monday criticised the policy as a broad-based ‘forever tax’ on the family home, and have countered with their own policy, lifting an existing tax-free threshold for first home buyers to all homes and apartments up to $800,000.
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,’ Mr 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 per cent 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.
Premier Perrottet, has called stamp duty an ‘inherently terrible tax’
The median average stamp duty in Sydney is $49,934. Pictured is an auction at Hurlstone Park in Sydney’s inner west
Sydney postcodes near the harbour earn the state a lot of money from stamp duty when they are sold. Pictured is a house in Vaucluse in the Sydney’s eastern suburbs