I join in debate on the Property Tax (First Home Buyer Choice) Bill 2022. This is landmark tax reform from the Perrottet Government. I have been watching this debate from my office in Parliament House because it is so important to the people of New South Wales. My first observation is that I have not seen a Government member participate in the debate for quite some time. I noticed a Government member join the debate about seven Labor speakers ago. I am surprised that only five Government members talked about this remarkable tax reform that the Government is absolutely leaning on to take it to the next election. I would particularly like to hear from the Minister for Customer Service and Digital Government, who has joint responsibility for the land tax Act. It would be handy to hear what he has to say. He is an excellent Minister with whom I get on extremely well, but where is he? Where is the housing Minister? I have not seen the housing Minister in the Chamber while we are debating that very subject. In fact, five Government members have spoken on the bill as well as the Treasurer, which speaks volumes.
Labor opposes this Government's plan to put a new tax on the family home. We know the Premier eventually wants to introduce an annual land tax on all residential properties, starting, of course, with first homes. Under this proposal, first home buyers will have to choose between paying the land tax and paying stamp duty. The Government will charge them an annual amount for as long as they own their property. The tax they owe will equal a fixed amount, plus an additional amount according to the unimproved land value of their home year on year. We know this new tax will hurt families and first home buyers, and we also know this is just the beginning. The Premier's plan to levy this new tax on every home owner in New South Wales is very clear—just take it from the Premier. He has already told Channel 9 that he thinks pensioners should be part of the scheme. He went even further in budget estimates when he said that they might be whacked with this new tax before the next election. Just yesterday, the Combined Pensioners & Superannuants Association raised significant concerns about the impact of the tax on pensioners and future taxes increasing saying:
The New South Wales Government's latest property tax proposal could turn out to be the thin end of the wedge. Once a property tax, even an insignificant one, is established, it will be easier to make it bigger in the future.
If re-elected and if able to finance the radical change from stamp duty to a recurrent property tax, the NSW Government would do so in a flash.
More than a quarter of the community that I represent are over 65 years of age. They are running to the hills about this. It is not something that my community accepts and it is not something that they will vote for. This Government has already broken faith with the people of New South Wales after promising at the last election no more privatisation, only to continue its ideological obsession of privatising public assets. Now, it wants to break faith once again and introduce a brand new tax on the home buyers of this State. It is not often I talk kindly of John Howard but at least when he introduced the GST and drove up the cost of living, he had the decency to take it to the people of this country. But not this Premier, he is treating us all like mugs. If he truly believes in this policy, he should have the decency to take it to the election and let people vote for it.
Let us not forget, the tax this Premier wants to introduce will last forever on the property and every time the value of the property increases so will the land tax. Put simply, this is absolutely a forever tax. The new tax will provide home owners with no certainty about the tax that they will have to pay. We need only look at average property prices, which have grown more than twice as fast as average wages during the past five years. They grew a staggering 25 per cent last year. That means the typical home owner's annual land tax bill will increase by more than double their annual income. What does that mean for voters? The cost-of-living pressures that families are already facing in this State will increase and it will get worse as the value of each individual home rises. The annual tax property owners will pay will also rise.
In the first year of the new tax we know that a typical family in Sydney will pay around $2,468, while a typical family in New South Wales will pay $1,715. That is on top of council rates, water rates and rising electricity bills—all going up, up, up. But what happens to those first home buyers who put their property on the rental market instead of selling it? That property will attract even higher land tax—closer to $10,000. That will place significant pressure on rents. Renters will absolutely absorb this cost. Many of my colleagues have talked about the impost that the bill will have on renters in the State; the very people who we should be caring for and looking after. In the electorate of Swansea you cannot get a place to rent and, if you can, many cannot afford it.
Those opposite have been talking about choice and how they are the champions of first home buyers. Unfortunately, the facts get in the way of that story. Currently, first home buyers who purchase a property for less than $800,000 are either exempt from stamp duty or entitled to a concessional rate. That helped 89 per cent of first home buyers during the last financial year and saved them more than $750 million. No such exemption will exist for land tax. First home buyers, who currently pay no tax, will get whacked with the Premier's new land tax. The land tax will leave first home buyers worse off.
But, what will it do to the property market? Even experts who support the land tax, like The McKell Institute, acknowledge that property prices are likely to rise by as much as 9 per cent. That means the cost of land tax for all those families will increase with it. The land tax will establish a multi-tiered property market where two neighbours can be in two totally different tax systems. That will create an administrative nightmare, particularly in strata schemes where, in order to know what to charge a first home buyer, every unit or apartment owner will have to have their property value apportioned. What will this mean for my community? Those located in the Central Coast local government area are, on average, looking at paying as much as $5,610.
In the first year, correct. I thank the member for Wollongong for his assistance. Those in the Lake Macquarie local government area will pay $2,630. People in suburbs like Budgewoi will pay $1,360; Gwandalan, $1,285; Mannering Park, $1,393; Belmont South, $1,517; Marks Point, $2,038; and in the suburb I live in, $1,733. As the Assistant Speaker knows, many of these are growing suburbs, attracting young families buying their first home. This land tax will increase the cost of living pressures that they face. [Extension of time]
That is not to mention the budget black hole that this reform will create. Our State stands to lose $1.2 billion in GST payments from the Commonwealth and that will place immediate pressure on the Premier to lift the rate of land tax. This is right up his alley, right according to his plan. We already owe a staggering $183 billion. That is the State's highest ever level of gross debt, and that will soar if we have to borrow an additional $3.2 billion each year to make up for the revenue we will lose as a result of introducing this shocking tax. That will mean New South Wales will have less fire power to protect jobs during any sort of economic shock, such as we had with COVID. We have also had the global financial crisis. While all of this demonstrates what a dud deal the Perrottet Liberal-Nationals Government is trying to impose on the people of New South Wales, the real sting in the tail is the housing unaffordability that this policy will create. What happens when you have housing unaffordability? You have homelessness. I do not support the bill. Clearly, many members on the other side do not either. They cannot even make it down to the Chamber to speak about it.