First Home Buyer Choice Scheme

The Hon. CHRIS RATH (17:06:15):

I move:

(1)That this House notes that as of 2 May 2023, 6,460 first home buyers have been helped to purchase their first home by opting to avoid $152.26 million in transfer duty on 3,967 properties (including 1,814 in Western Sydney, 157 in the Hunter and 51 in the Northern Rivers), under the fantastic First Home Buyer Choice scheme launched by the previous New South Wales Liberal‑Nationals Government from 11 November 2022 after it was supported by the House.

(2)That this House calls on the Government to assure prospective New South Wales first home buyers that the scheme will not be terminated but will be continued in full.

This important motion, which I urge the members opposite to look at, really comes to the question of choice. We on this side of the Chamber, when we were in power, fundamentally believed in the choice of first home buyers to determine their best financial interest. It seems that those opposite believe that the Government should determine what is in home buyers' best financial interest. We believe that the first home buyer market is as complex and sophisticated and well-informed as ever before. We trust individual home buyers, their own judgment, their preferences and their research.

The former New South Wales Liberal Government stood by the important principle of choice in passing significant reforms to stamp duty. The origins of stamp duty can be traced back to our colonial past and it has become economically irrelevant to modern Australia. Stamp duty is an inefficient and distortionary tax that puts in place a large obstacle for first home buyers to jump over. That is why numerous tax reviews, State and Federal, have said that stamp duty needs to be phased out and replaced with other taxes, like land tax. The Labor Party used to believe in getting rid of inefficient taxes like stamp duty.

The Australian Capital Territory Labor Government should be congratulated on transitioning away from stamp duty. The key difference in the New South Wales model, though, is choice. The Australian Capital Territory model locks properties in to land tax in perpetuity, whereas the New South Wales model offers first home buyers a choice between stamp duty and land tax. Stamp duty, on average, adds 2½ years to the time required for first home buyers to save for a deposit. First home buyers want their foot in the housing market now, not in 2½ years time. That is why, as the motion states, 6,460 first home buyers have already opted into the former Government's scheme, and an average of 6,550 will do so each year. That includes 1,814 first home buyers in Western Sydney, 157 in the Hunter and 51 in the Northern Rivers.

New South Wales Treasury analysis shows that it would take 36 years for a first home buyer to break even between up‑front stamp duty and an annual land tax on an average $800,000 apartment. Nobody is forcing anyone to pay the land tax. People can choose whether they lock in with the land tax or pay the stamp duty up‑front. But if it is going to take someone 36 years to break even, why on earth would anybody choose the stamp duty over the annual land tax option? Studies consistently show that first home buyers spend 10 years on average in their first property, meaning that they are considerably better off choosing an annual land tax as opposed to a large up‑front fee. We know that a person's first home is rarely their forever home. This policy creates choice, and that is why we will be defending it.

Labor will argue that its policy to provide concessions on stamp duty for first home buyers on properties above $800,000 is adequate. However, that proposal will limit the type of property first home buyers can acquire without being slugged with large up-front stamp duty fees. If someone wants to purchase an apartment with more than one bedroom, they can forget it—especially in Sydney. Under NSW Labor people will be required to pay significant up-front costs to the Treasury. A property worth $850,000 will incur $10,000 in up-front stamp duty while that figure will jump to $20,000 for a property worth $900,000. You cannot get a lot in Sydney for $800,000 anymore. Compare that with the current scheme introduced by the Coalition, where the up-front costs for properties worth less than $1.5 million is zero dollars.

Many first home buyers would have planned to choose an annual land tax as opposed to a large up-front fee, but now the Labor Government is telling first home buyers that they must go back and save thousands of dollars before they even think about purchasing their first home. That is why we will oppose any attempt to repeal the First Home Buyer Choice policy. I commend the motion to the House.

The Hon. NATALIE WARD (17:11:26):

I support this sensible motion and thank the Hon. Chris Rath for bringing it to the House. Paragraph (1) is entirely factual. Core to the issues in paragraph (2) are the Liberal values of opportunity, freedom, aspiration and reward, which form the basis of sound government. The Coalition continues to support choice for first home buyers to pay less up-front, cutting the time it takes to save for a deposit. It makes sense. A purchaser of a home worth up to $1.5 million can avoid up-front stamp duty by paying an annual levy based on land value. Under the Minns Government proposal, however, a family paying the median price for a house in Parramatta will be forced to pay up to an additional $59,000 in stamp duty. In Rockdale it would be around $63,000 and in Kogarah more than $70,000. All they want to do is force people to pay more money. What we want to do is preserve their choice.

Labor's plans to abolish the First Home Buyer Choice scheme and slug young, aspirational people with sizeable additional costs means many families will have their dream of home ownership and economic security cruelly snatched away. Having to pay crippling stamp duty will leave families across Sydney facing more economic stress. Revenue NSW data shows 3,726 home owners have opted in to the scheme since January and more than 2,300 first home buyers signed up in the scheme's first two months. Treasury estimates showed that two-thirds of eligible first home buyers would choose the first home buyer scheme. The scheme is popular: It is wanted by the people of New South Wales and it is wanted by first home buyers. If they want choice, they should be afforded it. If they do not, they do not have to take it up. The scheme means that people are able to get their deposit faster, particularly at a time when families are facing increased cost-of-living pressures. We will always stand up for the rights of families and individuals to choose how they enter the home market.

The bottom line is that we want to preserve choice and give first home buyers the opportunity to achieve the great Australian dream of owning their own house or apartment. We want them to experience the excitement of being in their own home. We know that housing affordability is dire in New South Wales, and we believe people should have maximum choice at this extremely difficult time. Labor says, "We will tell you how to live your life and what's good for you. We will pick winners and losers." We say, "We will get out of the way. We will let first home buyers have their choice." I say congratulations to the young people who signed up to the scheme in time. To the first home buyers and young families still looking to buy in this dire time I say welcome to life under Labor.

The Hon. DAMIEN TUDEHOPE (17:14:26):

The First Home Buyer Choice scheme is an aptly named program targeted at an important segment of the community—first home buyers who are transitioning from renting to purchasing their own home. The name of the program includes the word "choice". It is an opt‑in program under which each prospective first home buyer can weigh up the relative cost of a large up-front expenditure or a transfer duty with a small annual property tax. Labor wants to remove that choice and force all prospective first home buyers considering the purchase of a property valued between $1 million and $1.5 million to pay an up‑front transfer duty of between $40,000 and $66,000. The current median price of a house in Box Hill is $1.25 million and in Rouse Hill it is $1.38 million. It is not surprising that 316 properties have been able to be purchased in postcodes 2765 and 2155 by first home buyers because of this program.

The motion cites data as of 2 May 2023. In the nine days since, a further 733 first home buyers have been helped by the program, with 207 properties purchased in Western Sydney alone. The motion calls on the Government to assure prospective first home buyers that the scheme will not be terminated but continued in full. If the Government stubbornly refuses to do that, then it at least owes it to the people of New South Wales to give advance notice of when it will withdraw support so that they can plan accordingly. Denying prospective first home buyers the popular choice of avoiding tens of thousands of dollars of up-front transfer duty may sadly result in the need for them to give up, for the time being, their dream of buying their first home. They will have to wait for the re-election of a government that actually supports the goal of home ownership. One of the most pressing problems for any government is housing and housing supply. A component of the debate about housing supply has to be affordability, which is impacted by having choice. It is absurd to think that members opposite would take that choice away but they seem committed to it. It is the most retrogressive step this Government will take.

The Hon. DANIEL MOOKHEY (Treasurer) (17:17:36):

The people of New South Wales had a choice between a policy proposed in good faith by the Liberal-Nationals Government and a policy proposed by the Labor Party, and they voted in the Labor Party at the recent election. We have a mandate to remove all first home buyers from this taxation system altogether if they purchase a property for less than $800,000. We have a mandate to offer a concession to those first home buyers purchasing a property for up to $1 million. I look forward to Parliament resolving the legislation that will implement that mandate.

I will save my substantial remarks until the Parliament can test the issues properly as part of that legislation. It is disappointing that the immediate step of the Opposition has been simply to deny reality about the outcome of the election. It is not surprising. When we had this debate in the last Parliament, I said that if the Liberal-Nationals won the election, we would recognise its mandate and the debate would be over. It is disappointing that the new Leader of the Opposition has moved the Liberal Party down the Peter Dutton pathway of total opposition and total obstruction, regardless of the will of the people of New South Wales. But who am I to give them political advice? I move:

That the question be amended by omitting all words after "That" and inserting instead:

(1)this House notes that the Government wants as many people as possible to be able to buy their own first home.

(2)this House notes the first home buyers policy taken by the Government to the recent New South Wales election.

(3)this House notes the first home buyers policy taken by the previous Government to the recent New South Wales election.

Ms ABIGAIL BOYD (17:19:45):

Briefly, I support the amendment to the motion the Treasurer just moved. I express my disappointment again, on behalf of The Greens, that the new Opposition in this place seems determined to rehash old policies and old arguments. We had an election and the Coalition lost. It did not just lose by a little bit; it lost by a lot. We now have a new government in place, and we will be doing things differently. The Greens look forward—

The Hon. Damien Tudehope:

We? "We will be doing things differently"? Are you the government?

Ms ABIGAIL BOYD:

No, no. For the clarity of the Leader of the Opposition in the House, I was not referring to myself being in government. I have no desire to be in government, thank you very much.

The Hon. Damien Tudehope:

We have no desire for that, either!

Ms ABIGAIL BOYD:

We—being the Parliament and the State of New South Wales—are now, on behalf of the people who voted in this Government, doing things differently. It is very disappointing that we do not have anything new from the Opposition and instead have this rehashing. For that reason The Greens will be supporting the amendment from the Treasurer, which makes it clear that there were two different policies taken to the election when it came to land tax and stamp duty.

When it comes to The Greens' policy on this, we have been very clear from the beginning that we support a broad-based and equitable transition away from stamp duty towards land tax and we support housing affordability measures. But as we made very clear, the so-called "home buyer choice scheme"—or whatever it was called—that was put forward by the Coalition last year was neither of those things. It did not improve housing affordability. On the evidence, it cannot improve housing affordability; we had an inquiry into the bill to show that. It is also not an equitable and broad-based transition away from stamp duty. The Greens, in government with Labor in the ACT, successfully implemented a broad-based transition away from stamp duty to land tax. We look forward to working with this new Government—once it has cleaned up the old Government's messes—to establish a far more equitable taxation regime in housing and make sure the housing market is not as distorted as it currently is.

The Hon. WES FANG (17:22:44):

I make a contribution to debate on this motion. I acknowledge that, yes, as the Treasurer has indicated, the Labor Party won the election. It did go to that election with a policy that it would abolish the initiative put forward by the Government in the last Parliament. But I think we need to be very careful about framing election wins as a total imprimatur of a policy platform and not perhaps acknowledging the merits of other policies.

On this issue, there is no doubt that while some of the initiatives the Labor Party seek to bring to this place and some of their policy positions on first home buyers are, I will say, welcome, there is a lack of understanding of the reality of what first home buyers face. Maybe that is because members on the opposite side of the Chamber have not ever had to scrape and save in order to get that deposit to buy a home. Maybe they have had well-paid union jobs, or have been union officials and had those well-paid jobs funded by members' dues. I do not think they actually realise what it is like to see house after house taken away from them by bidders who have more money, in circumstances where the stamp duty required to buy that first home is the difference between them being able to purchase or not.

The Coalition policy allowed those buyers to opt in to an annual payment instead of a lump sum stamp duty. It may be that those buyers would only have that property for five or 10 years and would be much better off under the Coalition policy rather than the Labor policy. The last thing I will say before my time expires is that I do not think the increase in the threshold that those opposite propose will really touch the sides. It is just not the reality of what first home buyers face these days.

The Hon. DAMIEN TUDEHOPE (17:26:04):

I speak to the amendment moved by the shadow Treasurer. While I note he is reluctant to speak in terms of—

The Hon. Daniel Mookhey:

I'm the Treasurer. You're the shadow Treasurer.

The Hon. DAMIEN TUDEHOPE:

I know. The State would be a lot better off if it was reversed, let me tell you.

The Hon. Wes Fang:

Not for long!

The Hon. Courtney Houssos:

It's four long years, my friend.

The Hon. Wes Fang:

Oh, it feels like it.

The Hon. DAMIEN TUDEHOPE:

I will just say this: The amendment proposed by the Treasurer is against circumstances where he does not want to articulate the substantive arguments in respect of a bill he will later bring to the House, and I understand that. He will come to this place and no doubt tell members about how important it is for people to pay lump-sum stamp duty. It is going to be an interesting discussion. In fact, the reason The Greens opposed our previous proposal—I think there was a quasi-admission made by Ms Abigail Boyd—was that in fact it did not go far enough. The inconsistency is—

The Hon. Daniel Mookhey:

Point of order: If the Leader of the Opposition wishes to speak on the amendment, he should speak on the amendment—not in reply to a contribution made by another speaker. It is a discretionary choice—

The DEPUTY PRESIDENT (The Hon. Rod Roberts):

I will rudely interrupt you, Treasurer. I hear your point of order, but I am watching the clock tick down. I inform the Leader of the Opposition that he must address the amendment.

The Hon. DAMIEN TUDEHOPE:

While motherhood statements have been offered by way of amendment, the third of those statements is this: "That the House supports measures to address housing affordability and all people of New South Wales have adequate shelter". That is eminently supportable, but if the Treasurer wanted to go down the route of addressing housing affordability, he would stick with what is a profoundly good policy to give people a choice not to pay lump sums at the time they purchase a property. That is a profoundly appropriate reaction to increasing housing affordability. The Treasurer should be supporting this motion and the people who have already embraced this scheme. He should be supporting the people who tomorrow will go out and buy a property and use this scheme because they see the benefit in doing so. The Treasurer should be encouraging people to get out there and buy a house tomorrow—"Because if you don't, I might bring in legislation which will make it a hell of a lot more difficult for you to do so."

The Hon. COURTNEY HOUSSOS (Minister for Finance, and Minister for Natural Resources) (17:29:15):

I speak in support of the amendment proposed by the Treasurer and I commend him for it. It outlines a very reasonable position, which Labor took to the election on 25 March and which the people of New South Wales endorsed and voted for. It is an interesting strategic choice for the former Government to come into this place and continue to try to defend its legacy. We have seen those opposite defend their legacy today on first home buyers. We have seen them try to defend their legacy on their decision to cut the Active Kids voucher. We have seen them defend their legacy on a range of other issues. I do feel sorry for them. I understand. On this side of the House, we understand that being in opposition is really hard. I look forward to those opposite spending many, many years discovering exactly how hard it is.

We went to the election with a clear policy to help more people buy their first home. Our policy was clearly targeted at people who are purchasing a home worth less than $1 million. Housing affordability is a huge issue across Sydney. Whether they are renters or first home buyers, it is incredibly difficult for people across the city—indeed, across the State—to find affordable housing. That is why we have a clear and costed plan to allow people who are purchasing a property costing up to $800,000 not to pay any stamp duty and to introduce a graduated system for properties costing up to $1 million, when they start paying stamp duty. We think it is important that those concessions are in place. It was a careful, considered and well‑costed policy that was crafted in opposition by the now Treasurer. It went through the Parliamentary Budget Office process and was costed, and now we are seeking to implement it.

Labor members want as many people as possible to be able to buy a place to call home, but we think that this is a careful and considered way for first home buyers to avoid a forever property tax, which is exactly what the former Government outlined before the election. That was its intention; that was its plan. That is what it took to the election, and it lost. Instead of accepting the loss, taking it on the chin, moving forward and trying to find a new policy platform, those opposite have come into the Chamber today to waste our valuable time defending their former policy position. That is why we are moving the amendment today. That is why we are saying no. First home buyers should not have to pay stamp duty on property costing up to $800,000. They should not have to pay a forever tax on their home. We should give them a discount that will allow them to get into the property market for the very first time. I commend the amendment to the House.

The Hon. ANTHONY D'ADAM (17:32:25):

The motion moved by the Hon. Chris Rath is ridiculous. The proposition that the Opposition is advancing, if the House were to accept this motion, is for the Government to immediately walk away from its election commitment. Is that actually what he is proposing we sign up to—breaking an election commitment made to the people? It seems that the Opposition does not understand the fundamentals of the Westminster democratic system. Competing parties put forward their policy positions to the people. The people get to decide. The people have decided; they voted for Labor. They voted for our policy offering, not that of those opposite. Theirs was rejected—and, interestingly, rejected in all the places where first home buyers are likely to be. In electorates like Leppington, Camden and Riverstone, their policy was rejected not slightly but overwhelmingly. There were massive swings against the former Government. It was total rejection. Then those opposite come into this place and want us to sign up to a policy proposition rejected by the people. That is fundamentally anti‑democratic and it should be rejected.

The Hon. AILEEN MacDONALD (17:34:07):

Please do not feel sorry for those on the Opposition benches; feel sorry for the people of New South Wales. The First Home Buyer Choice scheme has already helped thousands of first home buyers jump into that elusive category of "home owner". It only takes a little imagination to realise just how much that means to the more than 6,000 participants in the new scheme. The ability to own a home is something that should not be out of reach for the average Australian worker, but for so many it has felt like an impossibility. Home ownership is, after all, the cornerstone of any civilisation, and with that home ownership comes confidence and security, alongside many additional benefits to the community. Home ownership means that residents are more willing to put down roots, to invest in their local communities, to take on civic responsibility and to raise a family. All of that is important because it builds community.

The rising house prices in our State have undoubtably caused stress for potential home owners, alongside rising mortgage rates, with the median value of residential houses in Sydney in 2021 the highest compared to any other major Australian city. But the roadblock is that transfer duty has caused further consternation and, in many cases, has made home ownership impossible—that is, until the New South Wales Liberal‑Nationals Government introduced choice for buyers in New South Wales. Who are the people who have been able to benefit from the First Home Buyer Choice scheme? It is mums and dads just starting out. It is tradies, entrepreneurs and small business owners. It is my niece, her husband and their newborn son, who would not have otherwise been able to afford their home but picked up the keys last Friday and, in her words, were so excited to start the journey of adulthood with a mortgage and a home.

Time expired.

The scheme has given those who have already participated the chance to get a foot in the market and has provided hope for so many others who are looking to buy in the next few years. It is imperative that this choice continues— []

The Hon. CHRIS RATH (17:36:53):

In reply: I acknowledge all of the contributions from speakers in favour of and against the motion. I particularly acknowledge the contribution from Ms Abigail Boyd. I was almost looking forward to an amendment aiming for the complete abolition of stamp duty, given her longstanding commitment to a broad‑based land tax and the abolition of stamp duty, but unfortunately that amendment was not forthcoming. I acknowledge that, ideally, if we were creating a tax system from scratch today, we certainly would not have stamp duty on property. That is an important starting point. But it is important also that we transition away from stamp duty, and the best way of doing that is by preserving the First Home Buyer Choice scheme.

The Opposition will not support the amendment—if you can call it an amendment. It is more of a motherhood statement. It is saying, "We trust the vibe of housing affordability," but there is absolutely no detail in there at all. In terms of the election and the so‑called mandate that the Government has on this, with a minority in the other place and a minority in this place, it is important that it looks at the crossbench in both places when it is putting its housing policy together. I think what it will find is that the vast majority of the crossbench in both Houses voted in favour of the First Home Buyer Choice policy, which is why it passed Parliament in the first instance. On the so‑called mandate that it has on the policy to repeal the First Home Buyer Choice scheme, we know that elections are a choice about a whole range of different policies. They are not about a single policy in particular.

But a very good indication of whether people want the First Home Buyer Choice program is how they choose to spend their money. When you give them the choice, they do not choose stamp duty. I would like to know how many people have chosen stamp duty and how many have chosen the land tax since we left government. When people are given the choice they do not choose stamp duty; they choose the annual land tax. If the previous Government's policy was so unpopular and if people hated the land tax so much, why are approximately three‑quarters of people choosing to opt for the land tax over stamp duty? That is how unpopular it is. People are choosing the land tax, not the stamp duty. This Government wants to take away their choice, which is why the Opposition will oppose the repeal of the First Home Buyer Choice program.

The DEPUTY PRESIDENT (The Hon. Rod Roberts):

The Hon. Chris Rath has moved a motion, to which the Hon. Daniel Mookhey has moved an amendment. The question is that the amendment be agreed to.

The House divided.

Ayes20

Noes13

Majority7

Amendment agreed to.

The PRESIDENT:

The question is that the motion as amended be agreed to.

Motion as amended agreed to.

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