Dominic Perrottet is confident he can achieve a major tax reform of the NSW housing market by year's end, saying the policy will be a "game changer" for people struggling to buy their first home.
The state government will introduce a bill to parliament this week which, if passed, would give first home buyers the option to pay an annual land tax, instead of being slugged with stamp duty.
"This is a game changer," the premier told reporters on Monday.
The opt-in trial for the First Home Buyer Choice scheme would mean first-time property buyers would not be burdened by having to save such large deposits to enter the property market, the premier said.
"We've all gone through those months and months of saving and saving and saving, to get in, and then by the time you get to the end, you've gone backwards," Mr Perrottet said.
"So many young people are struggling to save that deposit. So many young people are doing it tough trying to get into the property market."
The proposed scheme will begin in January, if it passes parliament this week.
Instead of paying stamp duty, buyers will be able to choose a $400 annual fee and 0.3 per cent of the land value while it's their primary residence, and the property's next buyer can opt out of the scheme.
The government says about 84 per cent of homes sold in NSW fall under the $1.5 million eligibility cap of the proposed scheme.
An online calculator on the ServiceNSW website was launched on Monday, allowing people to search for a property to see what they would pay in stamp duty compared to the land tax, using data from the valuer-general.
An $830,000 apartment with a land value of $265,000 would attract an $1195 payment in the first year, compared to $32,440 for stamp duty.
A $1.35 million house with a land value of $810,000 would command $58,450 in stamp duty, compared to a $2830 first year payment.
Land suitable for development is a finite resource and land values usually increase over time, pushing up the payment along with it.
With the trial budgeted at $728.6 million over four years, the change would cost the budget in the short term, but ongoing land taxes could provide a more predictable revenue base compared to stamp duty, which depends on property transactions rather than ongoing ownership.
Labor will oppose the land tax trial, warning it will become a "forever" tax on about 80 per cent of all family homes and properties.
Shadow treasurer Daniel Mookhey said he was disappointed in the premier's attempts to push the changes through parliament before year's end.
"The biggest change to NSW tax law in 50 years should not be rushed through the parliament in 15 days."
"It's not a change that (Mr Perrottet) has a mandate for, and he shouldn't be trying to rush this through the parliament in October when there is an election in March."
Mr Mookhey said he was concerned by a warning from the Commonwealth Grants Commission the changes could lead to NSW losing up to $1.2 billion in GST revenue.
The Greens indicated they were broadly in favour of a well-planned move away from stamp duty to land tax, but said Mr Perrottet's model was far from ideal.
"This is not a reform you can rush through without adequate thought and consultation," Greens MP Abigail Boyd told AAP.
"We will be pushing for this bill to be referred to an inquiry to make sure we get it right."
The premier said he was confident the government could get the bill through, and was in talks with members of the crossbench.
"As a father, the number one concern I have for my kids, is being able to buy a home in our great state," Mr Perrottet said.
"There's not a parent across NSW who is not concerned about that."
