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ABC News
ABC News
National
state political reporter Ashleigh Raper

NSW government set to abolish first home buyer land tax choice

NSW Labor vowed to remove the Coalition's land tax policy if it won the state election. (AAP: Dan Himbrechts)

The Minns government will this week move to abolish the Coalition's first home buyer land tax choice and replace it with increased stamp duty exemptions. 

It plans to introduce legislation when parliament returns on Tuesday.

Late last year, a bill was passed to give first home buyers an option to pay an annual land tax instead of stamp duty on properties up to $1.5 million.

Since its inception, almost 5,000 properties have become part of the land tax scheme.

The government says that option will cease to exist from July 1, but home owners who have already opted in can continue to pay the land tax until they sell their property.

Labor made it clear it would abandon the land tax choice in the lead-up to the March election.

Instead, first home buyers will not have to pay stamp duty when purchasing a property to the value of $800, 000.

Almost 5,000 properties are locked into the scheme. (AAP: Bianca De Marchi)

Premier Chris Minns has been arguing the merits of Labor's scheme over the previous Coalition government's assistance.

"This is a fairer and simpler system to ensure more first home buyers have a chance of owning their first property," he said.

"I understand the stress of trying to purchase your first home. I want more singles, couples and families realising this dream."

The government's plan lifts the current exemption from $650, 000 to $800,000.

It says first home buyers will save $31,000 in stamp duty when they buy an $800,000 property.

There will also be reductions in stamp duty for first-time buyers of properties up to $1 million.

The opposition has vowed to try to block the repeal of the land tax choice, which was a signature policy of the previous Perrottet government.

Despite being in minority in both the lower and upper houses of parliament, the government's legislation is expected to pass.

But the numbers could be tight in the upper house.

The government wants its new first buyer program in place by July 1.

It is also expected to make changes to the previous government's shared equity housing scheme, which also passed parliament late last year.

Labor is supportive of shared equity, but Treasurer Daniel Mookhey says the state's system appears to be flawed.

"The preliminary advice we've received is that It requires work," he said.

"Perhaps the criteria for who is eligible has been set too narrow as well as the requirements for property thresholds that you can afford to buy aren't necessarily suitable."

Treasurer Daniel Mookhey says the shared equity scheme needs more work. (ABC News)

Currently, frontline workers such as nurses and teachers who are first-time buyers can access the scheme.

It also includes single people over the age of 50 and single parents with a child under the age of 18.

They need to have a 2 per cent deposit and the government will have an up to 40 per cent stake in the property.

Those wanting to opt in can not earn more than $90,000 each year if they are single, or $120,000 for couples.

There are 3,000 spots available each year.

On Sunday, the government announced it was also investigating making domestic violence victims eligible for the scheme.

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