South Australia moves to scrap stamp duty for downsizers

South Australia is poised to become the first state in the nation to completely abolish stamp duty for eligible downsizers under a major election pledge unveiled by the state government.

Premier Peter Malinauskas has announced that, if re-elected, a Labor government would scrap stamp duty for South Australians aged 60 and over who sell their existing family home and purchase a newly built or off-the-plan property valued at up to $2 million.

The proposal, positioned as both a housing supply and cost-of-living measure, would allow eligible buyers to save up to $103,830 in stamp duty, a significant increase on the $15,000 concession proposed by the state opposition.

The full exemption would apply to buyers aged 60 or older who purchase a smaller dwelling as their principal place of residence and sell their existing home. The concession could only be accessed once.

“Our plan to abolish stamp duty for downsizers is specifically calibrated to increase housing supply, while also freeing up larger homes for families,” Mr Malinauskas said.

“By abolishing stamp duty, we are offering a real incentive to older South Australians to downsize.

“Under our plan, seniors can save more than $100,000, compared with $15,000 under the Liberals.”

Under the proposed scheme, someone purchasing a $1 million newly built home after selling their larger residence would receive a concession worth $48,830. That rises to $76,330 on a $1.5 million purchase and up to $103,830 on a $2 million property.

The announcement came as South Australia formally entered caretaker mode ahead of the 21 March state election, with Mr Malinauskas and Deputy Premier Kyam Maher visiting Government House to trigger the campaign.

SA plan a national-first

The policy is being framed as a way to address housing shortages by unlocking established homes that are often underutilised.

Like other states, South Australia faces tight housing supply, rising prices and rental pressures. Governments across the country have increasingly looked to downsizing incentives as a way to free up family-sized homes without expanding urban sprawl.

Unlike some interstate arrangements, however, the South Australian proposal would remove stamp duty entirely for eligible downsizers rather than offering a capped concession.

In New South Wales, for example, downsizers do not receive a blanket stamp duty exemption, though there are limited concessions for first home buyers and certain off-the-plan purchases.

Victoria similarly does not provide a broad stamp duty waiver for older owner-occupiers, though pensioner concessions and temporary off-the-plan concessions have existed. Queensland has offered some transfer duty concessions for seniors in certain circumstances, but not a full abolition at this scale.

If legislated in its proposed form, South Australia’s model would represent the most generous state-based stamp duty incentive for downsizers currently on offer nationally.

Steve Douglas, Executive Chairman, SMATS Group, said he hoped the South Australian proposal would be adopted by other states.

“Stamp duty has become one of the largest costs and impediments to transacting in the property market, so an initiative like this is an encouraging step in the right direction and shows great respect to hard working Australians who have spent their lives building a foundation and financial future for their family.

“Unlike many other options being considered, including the potential increasing of capital gains tax on investment property, this change will provide motivation to increase the housing stock by incentivising new property acquisition and the release of potentially sub-dividable properties.

“The simple fact is that the only way to genuinely improve housing affordability is to increase supply, so this is a very welcome step in the right direction and hopefully other states take note and follow suit.”

Political dividing line

The policy has immediately sharpened the contrast with the Liberal opposition.

Opposition Leader Ashton Hurn has pledged a $15,000 one-off stamp duty concession for over-55s who downsize to a lower-value property, capped at homes priced above $1.2 million.

The scale of the difference, potentially more than $100,000 under Labor compared to $15,000 under the Liberals, is likely to become a central talking point in the housing debate during the campaign.

Federal Liberal frontbencher James Paterson has acknowledged the political challenge facing his party in South Australia, noting recent polling has been difficult for the opposition. He described Mr Malinauskas as “one of the most popular state leaders in our country” while praising Ms Hurn for leading under challenging circumstances.

Who qualifies?

Under Labor’s proposal, applicants must:

• be aged 60 or older
• purchase a newly built or off-the-plan dwelling
• intend to live in the property as their principal place of residence
• sell their existing principal residence
• buy a property valued at up to $2 million that is smaller in land or apartment size than their previous home.

The exemption would be available once per eligible applicant.

Economic impact questions

The policy is expected to cost the state budget tens of millions of dollars in foregone stamp duty revenue. The government argues it would be offset in part by increased construction activity and greater turnover in the housing market.

By restricting eligibility to newly built or off-the-plan homes, the plan is also designed to stimulate additional housing supply rather than simply inflating prices in the established market.

Whether it will materially increase the number of larger homes available to growing families or simply shift buying patterns among older homeowners is likely to become a key point of economic debate as the campaign unfolds.

With housing supply and affordability central to voter concerns, stamp duty reform has again emerged as a powerful political lever.

If South Australia proceeds with a full exemption for downsizers, it may place pressure on other states to consider similarly bold measures.