South Australia scraps stamp duty for first home buyers
The South Australian Government has made the most ambitious changes to stamp duty in the country, scrapping the insidious tax for first home buyers buying a new home valued up to $650,000.
South Australia has scrapped stamp duty for first home purchasing a new home valued up to $650,000.
The relief package, which phases out for properties valued up to $700,000, was announced late Thursday (15 June) as a key plank of the SA Government’s State Budget 2023-24. It also applies to vacant land valued at up to $400,000 used to build a new home.
South Australian Treasurer Stephen Mullighan said the move is aimed at helping more South Australians into home ownership while boosting the supply of new homes in the housing market.
He said rising interest rates had crushed the home ownership dreams of many young people and this would go some way to alleviating those affordability pressures.
“This budget gets them fairly and squarely back with home ownership in their grasp,” he said.
“This provides an incentive for more supply, creating a pipeline of work for the building industry for years to come,” Mr Mullighan added.
What it means for first home buyers
|Purchase price||Standard 20% deposit at a bank||2% deposit HomeStart loan||Stamp duty and FHOG benefit*^||Total support available^|
CEO of the Real Estate Institute of South Australia (REISA), Andrea Heading, told API Magazine that they supported the move but want even more progressive moves implemented.
“While ultimately we would like to see stamp duty abolished across all fronts, this is certainly a step in the right direction,” Ms Heading said.
“We also commend the increasing of the First Home Owners Grant (FHOG) property value cap to $675,000, which reflects the significant increase in land and build costs and more closely aligns the FHOG with Adelaide’s median house price.
“The State Government has reported that encouraging new house builds is expected to provide important support to the building industry, which is starting to slow as the Covid stimulus spike wears off and higher interest rates slow demand.”
Ms Heading said REISA expects these initiatives will assist around 3,800 first home buyers each year.
South Australia Premier Peter Malinauskas said everyone deserves a home.
“We’ve already announced the state’s largest-ever land release, significant reforms for renters and the first increase in public housing in a generation.
“Now, we’re taking the next step so that more people can own their own home.
“These reforms will slash almost $45,000 off the cost of an average new home for a first home buyer, making it easier for them to enter the market and cheaper for them to pay their mortgage.
“Importantly, this will also help stimulate new supply in the market, helping ease the housing crisis for everyone, and providing a pipeline of work for an important sector of our economy.”
South Australia’s stamp duty reform is the most significant in Australia.
Other states have also had stamp duty under the microscope, with New South Wales recently lifting the threshold for stamp duty exemptions and bringing in concessions for first home buyers, while Victoria has abolished stamp duty for commercial and industrial property transactions.
As is the case in NSW, the SA stamp duty exemption does not apply to anyone buying an existing house or apartment, with only new construction qualifying.
To help first home buyers save for a deposit, the Budget also made changes to HomeStart.
It will now introduce a new home loan that will enable eligible first home buyers building a new home to take out a loan with as little as a 2 per cent deposit. This measure improves on the government’s election commitment of 3 per cent.
A fast-tracked approval process will also be implemented for eligible first homebuyers to expedite the planning approval process to see them in their new home sooner.
The budget papers said 564 new public housing homes would be built and the planned sale of 580 public housing properties halted.
In the largest residential land release in the state, 25,000 new blocks would be made available across Adelaide’s northern and southern suburbs.
The SA Government said it would deliver more than 1,200 more social and affordable homes, including around 700 affordable homes as part of the state’s share of the National Housing Accord. Key sites include Park Court on Greenhill Road, Newton Boulevard, Playford Alive, Second and Third Street, Bowden, and Churchill/Regency Road, Prospect.