First-home buyers in New South Wales will now be able to choose between paying an annual land tax or a lump sum stamp duty after Premier Dominic Perrottet’s signature tax reform became a reality.

Legislation to give first home buyers the option to pay an annual tax on all properties up to $1.5 million passed the parliament on Thursday.

Buyers could access the scheme by Saturday, if Governor Margaret Beazley provides assent before then.

Property developer lobby Urban Taskforce called for the federal government to work to ditch “highly inefficient” stamp duty nationwide.

Mr Perrottet, who has long wanted stamp duty reform, said the policy would allow people to save more.

“For the first time, we will provide first-home buyers with a choice, helping thousands of people to shave around two years off the time needed to save for a deposit,” he said.

“We know there could be nothing more important than home ownership, particularly for young families.”

Labor was vehemently opposed to the scheme, calling it a “Trojan horse” to introduce a broad-based land tax on families, that will steadily increase over time.

“Our concern is that future governments will jack up the land tax rate,” Labor leader Chris Minns said on Thursday.

“If you’re already on that merry-go-round, you have to trust this premier, and all future premiers, not to up the land tax rate on your family home.”

Labor has vowed to repeal the legislation if it wins government at the March election, although any first-home buyers who use the scheme will be able to pay land tax for the life of their property.

Greens MP Abigail Boyd criticised both parties for their approach to the bill, and proposed it not come into effect until after the election.

“It seems like an incredible waste of time and money, as well as creating huge uncertainty for first-home buyers, if we allow this … bill to take effect now, only to have it unwound if Labor win the next election,” Ms Boyd told AAP.

Her amendment was defeated.

The premier has insisted the reform will allow first-home buyers to make a decision to suit their own financial circumstances.

“This will enable young people particularly to get into the housing market faster, to have their wealth grow with them,” Mr Perrottet said.

Those choosing the annual tax will pay the equivalent of the up-front stamp duty after 21 years to 63 years, depending on the purchase price, Urban Taskforce chief executive Tom Forrest said.

“These changes will make it easier for first-home buyers to enter the market and the choice, for most, will be a no-brainer decision,” he said.

-AAP