Big change for homebuyers

Instead of an exemption from stamp duty, first-time buyers would get a grant worth up to $25,000 under the proposed overhaul.

The state Treasurer revealed in Tuesday’s budget plans to ask the public’s opinion on scrapping stamp duty and replacing it with a smaller annual tax.

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Stamp duty is a tax the government charges every time someone buys a new property. First-time buyers already benefit from an exemption if the home they’re buying costs less than $1 million.

Dominic Perrottet said the current system was “one of the biggest financial barriers to home ownership” in NSW and said an overhaul would enable more people to be able to buy a house.

“This is the single most important economic reform we can tackle to turn the Australian dream into NSW’s reality,” Mr Perrottet said.

“This is a reform proposal for NSW where more people can own their home and have more freedom to choose the right property for their family at every stage of life.

“This is a vision for every person and family in NSW – from first home buyers trying to get a foot on the property ladder, to frontline workers moving to service our regional communities, and retirees who are ready to downsize.”

Instead of an exemption from stamp duty, first-time buyers would get a grant worth up to $25,000 under the proposed overhaul.

The Treasurer said his plan would incentivise home ownership by installing a lower rate for those who live in the houses they own, and a higher rate for investors and commercial properties.

Stamp duty collection has traditionally been one of the state’s biggest revenue sources, with $13.8 billion collected in the 2016-17 tax year according to an ABC News investigation.

But Mr Perrottet said scrapping the duty could end up earning the state money.

“This model may inject more than $11 billion into the NSW economy in the first four years and boost NSW gross state product by 1.7 per cent over the long term,” Mr Perrottet said.

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