Future drought-affected farmers could be bankrupted by a proposal to replace one-off stamp duty with a broad-based land tax.
That's the view of NSW Farmers President James Jackson.
The Guyra-based farmer told the Leader he wants government to abandon a proposed new state tax reform which would impose a land tax on agriculture, calling instead for a full review of all state and Commonwealth taxes.
"We don't like stamp duty and we probably like land tax less," Mr Jackson said.
"The problem with land tax, of course, is that our income is really lumpy. [Land tax] is a charge that's charged every year."
The reform, which was announced as part of Tuesday's budget, would allow new home buyers to elect whether to pay the upfront stamp duty, or to instead pay an annual levy on the unimproved value of their property.
That includes agriculture.
Primary producers are set to pay an annual land tax worth 0.3 per cent of their land value, according to a NSW Budget consultation paper.
Mr Jackson said a land tax would have "put a lot of people out of business" in the recent record-worst drought.
Farmers in drought tend to earn limited or zero income and most "hunker down", slashing business costs and personal spending to reduce borrowing, he said.
But if there's a fixed land tax every year "people can't hunker down in a drought and make all those savings," Mr Jackson said.
"I think the drought basically destroys the argument that these fixed costs [are a good idea].
"Governments like reliable fixed income streams, there's no two ways about it. Farmers would like it as well, but we don't get that privilege. We are at the mercy of the climate and markets. Our income by definition is very lumpy. Land tax is a charge that is charged regardless of the profitability of agriculture."
In a statement Deputy Premier John Barilaro confirmed the government was planning to include agricultural properties in the proposed reforms.
He said the government wanted to "give farmers the choice to pay either the upfront cost of stamp duty or spread out the cost over time through an annual property tax.
"Labor wants to deny farmers this choice!"
He said the proposal is subject to a consultation paper and encouraged the community to give their views on the proposal.
Chairman of Tamworth's NSW Farmers branch Kevin Tongue said the levy would just be another burden on local agricultural industry.
"We don't want another tax!" he said.
Stamp duty has been widely condemned by economists as an inefficient tax that discourages the sale of homes and can be a barrier to home ownership.
The tax, now formally known as 'transfer duties', adds about $46,000 to the cost of the sale of a million-dollar house in duties to the state government.
Treasurer Dominic Perrottet said the change would be "the most important economic reform in the last half century."