Leeton real estate agents have expressed doubt over the NSW government's plan to scrap stamp duty in favour of an annual land tax

NSW Premier Dominic Perrottet announced this week he would be meeting with federal government to discuss introducing an annual land tax on home owners to improve housing affordability.

Under the proposed scheme home owners could either choose to pay the one-off stamp duty, or a smaller and permanent annual land tax. Stamp duty would eventually be removed altogether.

Despite the state government's efforts to stimulate potential home buyers and lower costs, Leeton Real Estate senior sales consultant Luke Santolin said the land tax might have the opposite effect.

"I agree that stamp duty is a significant cost that delays the buyer's ability to get into the market," Mr Santolin said.

"But incentives of this type normally drive up house prices even further by making it easier for more buyers to get in.

"I don't think it's going to improve affordability," he added.

IN OTHER NEWS:

According to Mr Santolin, the ongoing housing shortage has continued to affect housing prices more so than stamp duty.

"Any time the government has introduced an incentive like the first home buyer's grant, prices have gone up due to increased demand and not enough supply," he said.

"The only way the government can stop the growth of house prices is by making more property available."

Despite agreeing that it would make housing more affordable, Glenn Preston of Glenn Preston Real Estate said an annual land tax would put long-term home owners at a disadvantage.

Under the proposed scheme, Mr Preston said routine buyers who regularly purchase and sell in large cities like Sydney would benefit from no stamp duty, while one-off home buyers would have to keep paying land tax in perpetuity.

"The people buying every 20 or 30 years are going to be left subsidising the people who are wheeling and dealing in real estate all the time," he said.

"Why should they have to pay land tax every year?

"I agree it will make things more affordable, but I don't agree with the fairness of it," he added.

Mr Perrottet will seek federal support during a meeting with Prime Minister Anthony Albanese on Friday.

Our journalists work hard to provide local, up-to-date news to the community. This is how you can access our trusted content: