Stamp duty breaks for first-home buyers could be replaced by grants of up to $25,000 under what would be the biggest shake-up in property taxes in a generation.

NSW Treasurer Dominic Perrottet has used the State Budget to outline reforms he claimed would make it easier for those trying to get into the market as well as families looking to upgrade or empty-nesters wanting to downsize.

In building the case, Mr Perrottet said since 1990 average stamp duty on dwellings had increased more than seven times compared to three times for average earnings.

 

NSW Treasurer Dominic Perrottet with the freshly printed 2020-21 NSW Budget Papers at Parliament House. Picture: NCA NewsWire / Christian Gilles
NSW Treasurer Dominic Perrottet with the freshly printed 2020-21 NSW Budget Papers at Parliament House. Picture: NCA NewsWire / Christian Gilles

He also said it now takes 2.5 years to save the money needed to pay for stamp duty on the average home, compared to one year when MC Hammer was top of the charts.

Removing the upfront cost of stamp duty would take tens of thousands of dollars off the cost of homes, the Treasurer said as he opened a public consultation process on his reform plan.

By removing barriers to purchase, the government believes there would be an $11 billion benefit to the state economy over four years.

Under the changes, buyers would have a choice between the status quo or an annual tax on land value.

It would only apply to future purchases, meaning if you are not buying a property there is no change.

"This is a substantial change to the system," Mr Perrottet said.

"We've got a model we believe works.

"I think choice is crucial going forward."

Mr Perrottet said the proposed model would be revenue neutral in the "short term."

NSW State Treasurer Dominic Perrottet enters a press conference before handing down the budget. Picture: NCA NewsWire / Jeremy Piper
NSW State Treasurer Dominic Perrottet enters a press conference before handing down the budget. Picture: NCA NewsWire / Jeremy Piper

Originally published as Plan to give first-home buyers $25,000 grant


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