Hunter Labor MPs say they oppose NSW Premier Dominic Perrottet's decision to expand a scheme for first home owners to swap stamp duty for land tax.
In an election pledge announced on Sunday, the Premier promised to expand stamp duty exemptions for first home buyers who decide to buy a second home.
Shadow Minister for the Hunter Yasmin Catley said this was "unbelievable".
Labor didn't support the initial stamp duty/land tax swap bill when it first passed Parliament in November.
It also opposes the scheme's expansion.
"It will be a forever tax on people's homes. It's as simple as that," said Ms Catley, the Swansea MP.
"This will do nothing to address housing stress or housing affordability - it's a smokescreen."
Newcastle MP Tim Crakanthorp said first home buyers that choose land tax under the Coalition scheme "get a dud deal, particularly if they want to upsize and rent out their first purchased property".
"Let's not forget that land values went up 25.6 per cent last year," he said.
Mr Perrottet said on Sunday that "stamp duty is a terrible tax".
"We're making it easier for first home buyers, many of whom are families, to reach the dream of home ownership sooner," he said.
He said the plan would give "first home buyers the opportunity to ditch stamp duty for the rest of their lives, saving them tens of thousands of dollars on each home purchase".
The Coalition's property tax scheme allows first home buyers to pay an annual tax rather than a one-off stamp duty on homes worth up to $1.5 million. This comprises an annual levy of $400 and a 0.3 per cent tax on the value of their land. The rate is $1500, plus 1.1 per cent of land value for investment properties.
Under the expanded scheme, the $1.5 million threshold would increase by $50,000 a year from 2023-24.
Owners can only hold two properties at any given time, but the scheme won't cover a third home.
Mr Perrottet said the expanded policy gives families "more choice when buying their next home, making it easier to upsize, move closer to loved ones, or relocate for a new job or when the kids start school".
Labor is concerned that future governments could raise the land tax rate.
Mr Crakanthorp said first home buyers would "pay less tax under Labor", as any property purchased under $800,000 will have "absolutely no stamp duty" and properties costing up to $1 million will have a reduced rate.
"We will not saddle first home buyers with a new, yearly tax bill that increases every year," he said.
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