First-time home owners who bought property in the past two months and now want to opt into the NSW government's land tax scheme will have their stamp duty refunded within two weeks.
The government's controversial program, which allows first homebuyers to choose between paying stamp duty or an annual land tax on properties up to $1.5 million, comes into effect today.
The legislation passed parliament last year and also applies to those who entered the market from November 11.
Government body Revenue NSW estimates that 2,500 people are likely to ask for a retrospective refund of their stamp duty, and pay an annual fee instead.
The government is promising that the refund will be processed within 10 business days.
Premier Dominic Perrottet has long wanted this change made.
"This national-first will significantly reduce up-front costs, reduce the time needed to save for a deposit and will see most first homebuyers pay less tax overall," he said.
A home owner will pay $400 plus 0.3 per cent of the land value each year.
NSW Labor has opposed the change, announcing they would scrap the scheme if elected in March.
Last week, the opposition revealed its counter-policy, promising to abolish stamp duty on homes up to $800,000 and provide a reduced rate on homes up to $1 million.
The opposition insists it would cost the government $722 million over four years, which is almost the same amount as the government's policy.
Currently in NSW, first-time buyers are already exempt from paying stamp duty on homes up to $650,000.
The government estimates that at least 6,000 first-time buyers will opt into its new land tax scheme each year.
Treasurer Matt Kean says more than 56,000 people have accessed the government's online calculator, which works out the difference between paying stamp duty and land tax.
"This new choice is empowering first-home buyers to get a foot on the property ladder," he said.
"This important reform means 97 per cent of first-home buyers will get a leg up under the Liberal-National government's policies, allowing them to buy the type of home they want, where they want to live."
