First home buyers: Chris Minns to scrap optional land tax, bring in stamp duty exemption

First home buyers in NSW could get a big head start from the state government, with a proposal to lift the stamp duty exemption limit from $650,000 to $800,000.

One of Labour’s election promises, the government will introduce legislation once parliament resumes this week.

It will also cancel the coalition’s First Home Buyer Choice (FHBC) scheme from July 1, despite opposition protests.

Minns (pictured left), who failed to win a majority government in the March 25 election, must fight to get his stamp duty reform passed through parliament

Under the new policy, first home buyers won’t have to pay stamp duty on homes under $800,000, which could save them up to $31,090.

They also gain access to significant concessions on homes up to $1 million; however, the benefits are calculated on a sliding scale depending on the cost of the home.

Stamp duty is currently only exempt on homes worth up to $650,000 in NSW.

NSW Prime Minister Chris Minns, who failed to run for a majority government in the March 25 election, could fight to get the reform through parliament.

Adopting his plan means dumping predecessor Dominic Perrottet’s flagship First Home Buyer Choice program, which the opposition has already pledged to protect.

Liberal leader Mark Speakman believes there is a ‘collective mandate’ to keep the scheme going, which was based on paying an optional land tax instead of stamp duty once a year.

That scheme had proved popular, with 4,842 buyers taking advantage of it since the law came into effect on January 16, with 1,000 as early as May.

Labor last year criticized the land tax scheme, calling it “an eternal tax on the family home”.

New treasurer Daniel Mookhey says the planned reform is “fairer and simpler” and will exempt more new buyers from paying stamp duty, also known as conveyance duty, which is a major cost of buying a home.

Mr Mookhey claimed the stamp duty reform would help those ‘most at risk of exiting the housing market altogether if interest rates rise’.

“This policy will provide the most assistance to first home buyers who are most at risk of exiting the housing market all together if interest rates rise,” he said.

“The new thresholds for stamp duty exemptions and concessions are an easier and fairer way to help more first home buyers than the property tax, which helped a smaller cohort of first home buyers.”

Buyers will also be required to live in their chosen home for 12 months, instead of six, in a move the government hopes will improve the integrity of benefits.

New Liberal leader Mark Speakman believes there is a ‘collective mandate’ to keep Perrottet’s plan going

Mr Minns said the policy would help more first home buyers move up the property ladder.

“I understand the stress of trying to buy your first home. I want more singles, couples and families to realize this dream,” he said.

“Under Labor, any property purchased under $800,000 will have absolutely no stamp duty, and any property purchased under $1 million will have a reduced rate.

“This is a fairer and simpler system to ensure that more first home buyers have the opportunity to own their first home.”

If Mr. Minns succeeds, Mr. Perrottet’s land tax will be abolished on new purchases from July 1.

The new legislation could allow anyone who bought under Perrottet’s scheme to continue paying property taxes until they are sold.