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Radical change to stamp duty in one Australian state comes into force TODAY – here’s all you need to know
The NSW premier says he is focused on creating “policy for the next generation” as he launches a major overhaul of the tax setup for first-time homebuyers in the state.
“We need to think big, do things differently and apply new policies to boost New South Wales,” Dominic Perrottet wrote in an opinion piece in the Sydney Morning Herald on Monday.
“I want to create policies for the next generation, not for the next election.”
The government’s First Home Buyers Choice scheme offers those buying a property under $1.5 million the option of paying either a one-time payment of stamp duty or an annual land tax.
Homebuyers in NSW will no longer have to pay thousands of dollars in stamp duty upfront. In the photo: Bondi Beach
Instead of paying the stamp duty fee in advance, buyers could choose to pay an annual property tax to the state government. Pictured: A Sydney home auction
Perrottet, who has long been open about his disdain for stamp duty, passed the reform in parliament last year.
Prime Minister and Treasurer Matt Kean will launch First Home Buyer Choice in South West Sydney on Monday.
Labor on Monday criticized the policy as a broad-based ‘permanent tax’ on the family home, and has responded with its own policy, raising an existing tax-free threshold for first-time homebuyers on all houses and apartments up to $800,000. .
Stamp duty would also be partly exempted for first-time homebuyers buying homes worth up to $1 million under Labor’s plan.
With the issue likely to become an election issue, Shadow Treasurer Daniel Mookhey said Labor had provided a better policy for first-time homebuyers.
“With real wages falling, interest rates rising and tolls exploding, paying annual property taxes will hit household budgets even harder,” Mookhey said.
We have a better plan. Tens of thousands of first-time homebuyers get a tax break,” he added.
“No one will have to worry about us imposing an annual property tax on their home, which could go on forever.”
The model for Parliament’s Budget Office estimates that around 95 percent of first-time homebuyers, or 46,000 people, could access full or partial exemptions 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.
Prime Minister Perrottet has called stamp duty an ‘inherently terrible tax’
The average stamp duty in Sydney is $49,934. Pictured is an auction at Hurlstone Park in Sydney’s inner west.
Sydney postcodes near the harbor make the state a lot of money from stamp duty when they are sold. In the photo, a house in Vaucluse, in the eastern suburbs of Sydney.