Newcastle residents could pay up to $5,532.54 in land tax annually if a government plan to introduce the controversial alternative to stamp duty becomes a reality, Labor figures show.
From next year, some first home buyers will be able to choose between paying the lump sum of stamp duty or an annual land tax.
Under the plan first home buyers purchasing a property up to $1,500,000 can opt to pay an annual fee of $400 plus 0.3 per cent of the land value.
Modelling prepared by the office of Shadow Treasurer Daniel Mookhey shows those opting to pay the tax in the Newcastle local government area would pay between $1,052.82 and $5,532.54 with an average rate of $2,165.27. It is estimated the average Sydney metropolitan rate is $2400.
In Cessnock, Labor estimates the tax would cost between $822.82 and $7,320.00, in Lake Macquarie between $1,035.82 and $2,630.59, in Maitland between $780.23 and $8,965.00, Muswellbrook between $651.94 and $999.10, Port Stephens between $930.93 and $6,755.38, Singleton between $532.02 and $5,340.00 and Upper Hunter $593.22 and $1,775.00
Premier Dominic Perrottet's radical plan to overhaul stamp duty and introduce a broad-based land tax was one of the major reforms of this week's budget.
Cabinet's expenditure review committee has approved a reservation of funding for the changes, which will put NSW in front of the other states in housing tax reform. Only the ACT has overhauled stamp duty.
But Shadow Treasurer Daniel Mookhey said the government did not have a mandate to introduce the new land tax.
"If it's good enough for John Howard to take the GST to an election, it should be good enough for Perrottet to do the same," he said.
"This is the "buy now pay later" budget. They are throwing billions out the door and how are they going to pay for it? $182 billion in debt and next comes taxing the family home."
"After 12 years of flatlining wages families are already struggling with massive cost of living pressures. How does this government think they can afford this land tax?"
Mr Perrottet said tax reform would only be achieved if the federal government came to the table.
"We need the federal government to help the states finance reforms to drive productivity to improve social outcomes like housing affordability, health care and education," he said.
Property Council NSW executive director Luke Achterstraat welcomed the reform.
"Stamp duty is volatile, it's inefficient, it actually traps people in their homes," he said.
"People feel they've made a really significant cost to purchase a property, so stay in their homes for longer than really is appropriate.
Mr Achterstraat said the existing stamp duty system represented a "triple threat" that was bad for home ownership, household mobility and jobs.
"What the government's done today is put a bit of a stake in the ground and say we're going to trial this change," he said.
