Stamp duty for first-home buyers has emerged as an early contentious topic for the upcoming March state election.
On Monday morning, the NSW Labor Party announced a new policy that would slash stamp duty for first-home buyers for properties up to the value of $800,000, with concessional rates given to homes up to $1m.
Both major parties are trying to woo first-home buyers ahead of the March 25 election. Picture: NCA NewsWire / Gaye Gerard
This compares with the Coalition’s First Home Buyer Choice scheme that allows wannabe homeowners to choose between paying stamp duty or an annual land tax calculated at $400 plus 0.3 per cent of the land’s value. Investment properties are costed annually at $1500 plus 1.1 per cent of the land’s value.
The scheme can be accessed now but comes into full effect on January 13 for properties up to $1.5m.
First-home buyers purchasing homes under $650,000 will still have their stamp duty waived.
However, the state Coalition believes their scheme gives prospective buyers a larger selection of properties under the threshold. According to Treasury costings, the removal of stamp duty will reduce the time it takes to save for a deposit by two years.
Speaking to media on Monday, NSW Treasurer Matt Kean said Labor’s plans meant fewer first-home buyers would be able to purchase their own home, with the Australian Bureau of Statistics (ABS) stating that the average home in NSW costs $1.125m.
“It’s only Chris Minns and Labor defending the most unfair and unpopular tax in the nation – and that is stamp duty,” Mr Kean said.
“What Chris Minns’s policy does is exclude people in purchasing property in a whole range of suburbs for those median house prices.”
NSW Labor leader Chris Minns says his party’s policy will be used by 95 per cent of first-home buyers. Picture NCA NewsWire/ Gaye Gerard
However, Mr Minns stressed that his government’s plan would apply to 95 per cent of first-home buyers who purchased properties under $1m.
“We’ve been really upfront about this, our policy is for the 95 per cent of first-home buyers in this state … 95 per cent of them will buy a property for $1m or less,” he said.
He hoped the policy would also reduce cost-of-living pressures for households – an issue routinely named as a top concern for voters.
“In conjunction with our policies in relation to renting, our policies in relation to planning, to population growth in Sydney, put together it’s an important jigsaw piece for a policy plan to put downward pressure on the family budget particularly for young families,” he said.
The Coalition’s plan for first-home buyers
• First-home buyers can choose between a paying stamp duty or an annual land tax
• The annual land tax is calculated at $400 plus 0.3 per cent of the property’s land value
• In numbers listed on the NSW government’s website, the break-even period for a $800,000 apartment would be 36 years, 28 years for a $1m townhouse and 26 years for a $1.25m house
• The scheme officially comes into effect on January 16; however, stamp duty can be refunded on purchases between November 11 and January 15 in lieu of an annual land tax
NSW Treasurer Matt Kean says fewer first-home buyers will be able to purchase their own home under Labor’s plan. Picture: NCA NewsWire/ Jeremy Piper
Labor’s play for first-home buyers
• Stamp duty will be waived on properties under $800,000. The current threshold is capped at $650,000
• Reduced stamp duty concessions on properties under $1m. For a property valued at $850,000, the stamp duty will be reduced from around $33,000 to $10,000
• Labor claims this will apply to 95 per cent of first-home buyers
• Labor claims that within three years, 27,7000 first-home buyers would be able to pay no stamp duty, with 18,800 first homebuyers accessing the tax cut at a discounted rate