Opposition to the NSW government's proposal to reform first-home buyer subsidies that would exempt the majority from paying stamp duty could blow a $700 million hole in the budget, the treasurer says.
The government on Tuesday secured support from key members of the cross bench to introduce laws to scrap the former coalition government's reforms which gave first-home buyers a choice between paying upfront stamp duty or a yearly land tax.
Premier Chris Minns says the legislation would create a simpler, fairer stamp duty concession scheme to ensure five out of every six future first-home buyers paid no tax or a reduced rate.
The former government's first-home buyer choice initiative will end in July, stopping those buying property up to $1.5 million from choosing between paying stamp duty up-front or an annual land tax.
The coalition says it will oppose modifications to its choice program and wants to keep the land tax scheme - which allows property owners to pay $400 plus 0.3 per cent of their property's land value as an annual fee - running concurrently with stamp duty concessions.
Shadow treasurer Damien Tudehope criticised Labor's proposal, saying it would remove the choice for first-home buyers and put them "two years behind" in saving for stamp duty.
The government has secured support from the Greens and independent MP Alex Greenwich, with the reforms likely to pass as soon as next week, but still requires support from two upper house crossbenchers.
Citing figures from a Treasury analysis, Treasurer Daniel Mookhey said the government would need to borrow an extra $700 million if it kept the annual land tax scheme.
Under the previous government's scheme, a first-home buyer with $800,0000 to spend would receive half of the assistance directed to someone with $1.4 million to spend, he said.
"Labor's proposal is targeted to maximise the support for the first-home buyers that really need it and it will be done as part of our fully funded election commitments," Mr Mookhey said.
The treasurer accused the opposition of reckless spending, saying tough decisions were needed to get the budget back in order.
