Merit in land-taxing pensioners, NSW says

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Stamp duty reform that offers first-home buyers the opportunity to pay land tax annually instead could be rolled out to pensioners too.

Dominic Perrottet has labelled stamp duty the "worst tax any state can have" and has long sought to rid NSW's dependence on it.

Under reforms announced in June's budget, first-home buyers will have the choice to pay stamp duty or an annual property tax based on land value and usage.

"There is merit in relation to providing choice to pensioners," Mr Perrottet told a budget estimates hearing.

"It isn't government policy but I believe there is merit in that."

His comment came after Labor, which is opposed to the stamp duty reform, asked the premier to rule out the policy's expansion,

"I believe in choice," Mr Perrottet said.

"I think that is something we should look at, as long as choice is at the heart of it."

His government plans to implement the tax reform in the October sittings of parliament.

Any changes to the stamp duty cannot proceed without approval from the federal government.

State Labor is opposed to the policy.

Labor's Daniel Mookhey suggested Mr Perrottet should follow the path of former prime minister John Howard, who took the GST to an election.

"Everyone would be able to appreciate there is a complete difference between a mandated tax on every citizen in the country or the state to a change in the tax system that allows people choice," Mr Perrottet said.