Dominic Perrottet is sure that he can achieve a substantial tax reform of the New South Wales housing market before the end of the year, claiming that the proposal will be a “game changer” for first-time homebuyers.
This week, the state government will propose a bill to the legislature that, if passed, would allow first-time homebuyers to pay an annual land tax instead of stamp duty.
“This is a game-changing development,” the prime minister told reporters on Monday.
The opt-in trial for the First Home Buyer Choice program would allow first-time property purchasers to access the market without having to save such huge deposits, according to the premier.
Premier of New South Wales Dominic Perrottet (pictured) plans to launch an ambitious law to assist first-time homebuyers by the end of the year.
Mr. Perrottet stated, “We’ve all gone through months and months of saving and saving and saving to get in, and by the time you reach the finish, you’ve gone backwards.”
So many young people struggle to save for a down payment. So many young individuals find it difficult to enter the real estate market.
If the new program is approved by parliament this week, it will be implemented in January.
In lieu of paying stamp duty, purchasers will have the option of paying a $400 yearly charge and 0.3% of the land’s worth while the property is their principal residence. The subsequent buyer can opt out of the program.
The government estimates that 84 percent of properties sold in NSW fall inside the proposed scheme’s eligibility limit of $1.5 million.
Using data from the valuer-general, an online calculator was released on the ServiceNSW website on Monday, allowing users to search for a home and compare the stamp duty to the land tax.
A $830,000 flat with a $265,000 land value would incur a $1195 payment in the first year, compared to stamp duty of $32,440.
A $1.35 million home with a land value of $810,000 would incur stamp duty in the amount of $58,450, compared to an initial payment of $2,830.
Land suited for development is a limited resource, and land values often rise with time, driving up the price.
The trial is estimated to cost $728.6 million over four years, so the change would cost the budget in the short term. However, continued land taxes could provide a more stable income source than stamp duty, which depends on property transactions rather than ongoing ownership.
The plan would allow first-time homebuyers to pay an annual land tax rather than stamp duty. While the property is the owner’s principal residence, the annual tax would be $400 + 0.3% of the land’s value (stock image)
Labor has criticized the proposal, arguing that it would impose a permanent tax on almost 80% of family houses and properties. The Greens supported a shift away from stamp duty but argued that Mr. Perrottet’s plan was not optimal for buyers (stock image)
Labor will reject the trial of the land tax, arguing that it will become a permanent levy on around 80% of all family houses and properties.
The shadow treasurer, Daniel Mookhey, was dissatisfied with the premier’s efforts to rush the measures through parliament before the end of the year.
The largest change to New South Wales tax law in fifty years should not be hurried through the legislature in fifteen days.
It’s not a measure for which Mr. Perrottet has a mandate, and he shouldn’t try to hurry it through the legislature in October when there’s an election in March.
Mr. Mookhey was alarmed by the Commonwealth Grants Commission’s warning that the amendments could cause New South Wales to lose up to $1.2 billion in GST revenue.
The Greens said that they were generally in favor of a well-planned transition from stamp duty to land tax, but they stated that Mr. Perrottet’s proposal was far from perfect.
Abigail Boyd, a Greens member of parliament, told the AAP, “This is not a policy that can be rushed without appropriate consideration and consultation.”
We will advocate for this law to be subjected to an investigation to ensure its accuracy.
The premier expressed confidence that the administration could pass the law and was in talks with crossbench members.
As a parent, Mr. Perrottet’s primary concern for his children is their ability to purchase a home in our magnificent state.
No parent in New South Wales is not concerned about this.