The New South Wales government expects first home buyers will have an easier time securing their first property after passing legislation last week that exempts more people from paying stamp duty.

The legislation specifically raises the threshold for properties exempt from paying stamp duty from $650,000 to $800,000, and offers concessions for properties worth between $800,000 and $1 million as part of the First Home Buyers Assistance Scheme.

The NSW government said first home buyers could potentially save up to $31,090 by scrapping the fees, which is how much previous stamp duty would cost for a $800,000 property under the previous scheme.

NSW treasurer said five out of every six first home buyers will pay no stamp duty or concessional rate at all.

The government expects around 8600 first home buyers each year will qualify for stamp duty exemption, and another 4400 can receive stamp duty concessions. This translates to 84 per cent of first home buyers being able to access assistance under the scheme.

The new scheme also scraps the previous Liberal government’s plan introduced in January 2023 that gave first home buyers the option to pay for stamp duty upfront, or pay an annual land tax fee. The NSW government said in a press statement that this scheme will end on 30 June 2023, but those that opted into it can continue until they sell the property.

Independent member for Kiama Gareth Ward supported the increased cap to stamp duty exemption but argued that the option to pay an annual fee should remain in place because most first home buyers in the electorate won’t be able to benefit from the changes. The average house price in Kiama is $1.4 million, which would only just qualify buyers for stamp duty concessions.

“Which is why I voted in favour of the stamp duty exemptions and to preserve the option of paying land tax rather than guillotining choices that people can make that are right for them and for their family,” said Mr Ward.

“We know the land tax scheme is popular, with 4,842 buyers taking it up since it’s been in place earlier this year, including 1000 already in May.

“It’s a good scheme and we should give it time to work and in the future look at broadening it to more people to allow more flexibility and more choice.”