This paper examines the potential increase in home ownership that could arise if the NSW Government replaced stamp duty and the existing land tax with a broad-based property tax levied on unimproved land values, as proposed in a Consultation Paper issued in November 2020 and updated in a Progress Paper issued in June 2021. Under this proposal, the property tax would replace transfer duty and land tax, over time, using a choice-based transition.

In June 2022, the NSW Government announced that it would implement a property tax that applies only to properties that have been purchased by a first home buyer for up to $1.5 million if the purchaser chooses to pay property tax instead of stamp duty. This paper examines what would happen to home ownership if all properties became subject to the property tax as set out in the Progress Paper. Home ownership here refers to the share of private dwellings that are owner-occupied.