An inquiry that delayed the debate of a government plan allowing more first-home buyers to avoid stamp duty has recommended debate go ahead.
The NSW upper house had already referred the Property Tax (First Home Buyer Choice) Bill 2022 to an inquiry before it passed the lower house last month.
The bill seeks to begin a two-year trial in January allowing first-home buyers to choose an annual land tax rather than paying upfront stamp duty on properties up to $1.5 million.
Existing concessions and exemptions are available for first-home buyers purchasing property under $800,000.
The government says it will help more first-home buyers get their first property sooner by removing the need for them to save up more money for stamp duty.
Labor has smeared the bill as placing a "forever tax" on the family home that will cost the government revenue.
The committee received 15 submissions and held one public hearing, making one recommendation for the upper house to proceed with a debate, addressing concerns identified by stakeholders in the inquiry.
Committee chair, Labor's Tara Moriarty, said the inquiry heard arguments in support of the bill, while some others raised concerns.
"Given the limited time available to the committee, the committee refers the bill back to the house for its consideration, including those matters set out in the report," she said.
Those matters include the frequency of the scheme being reviewed, whether it will increase demand and therefore the price of property, and whether more buyers should be able to opt for land tax.
The calculations used to determine the tax paid could also be subject to debate.
Government bureaucrats told the hearing they were preparing for the scheme to begin in January.
The report notes a "very tight turnaround" limited the committee's capacity for a full inquiry.
The land tax option is a pet-policy of Premier Dominic Perrottet, who called on the opposition to stop stalling its passage through parliament on Friday.
"Labor should get out of the way (rather than) not allowing first-home owners to get their keys to the great Australian dream," he said.
"That's what this reform is all about."
The report noted the scheme favours people buying apartments, which some submissions to the inquiry said was appropriate.
While unit purchases are more reflective of the modern property market for first-home buyers, particularly in cities, it is less aligned with traditional ideal of the "great Australian dream" being a detached home with a Hills Hoist anchored in a backyard capable of hosting a barbecue.
Properties satisfying that criteria are less likely to fall under the $1.5 million cap, but Treasury analysis has calculated about 84 per cent of homes sold in NSW would.
Opposition Leader Chris Minns said the scheme will end if his party takes government in March, two months after the trial is set to begin.
NSW parliament resumes next week for its final nine sitting days before the election.