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The South Australian government has announced that stamp duty has been abolished for first-home buyers (FHBs) who buy or build a new home, as part of the state’s 2024–25 budget.
In an attempt to boost housing supply in South Australia, the state government has removed property value thresholds for the stamp duty exemption and First Home Owner Grant.
Previously, FHBs were able to access the stamp duty exemption threshold if they purchased a new home that cost $650,000 or less, a policy that was brought in by the state government as part of the 2023–24 budget.
The South Australian government said the amendments to the state’s stamp duty policy could save FHBs more than $50,000 (including the First Home Owner Grant) if they purchased a property worth $750,000.
The FHB stamp duty exemption is available to FHBs who purchase any newly built home, including houses, units, apartments, town houses, and flats. The exemption is also available for off-the-plan apartments, house and land packages, and vacant land.
The Premier of South Australia, Peter Malinauskas, said on the motivation behind the abolition of stamp duty for FHBs: “We are amid a national housing crisis borne of successive governments failing to do enough to build new homes.
“Every new home built in our state benefits the rest of the housing market. Every first home buyer that can move into a new home means one less buyer or renter competing for existing stock.”
Stephen Mullighan, South Australia’s Treasurer, said that the government is “acutely aware” of the challenges that young people face when looking to enter the property market and said it is “determined” to support young Australians into home ownership.
He said: “That is why we have taken the step to abolish the property value cap on the stamp duty exemption for first home buyers who buy or build a new dwelling to ensure all first home buyers who choose this option no longer have to pay stamp duty.”
According to Nick Champion, the Minister for Housing and Urban Development, the key to tackling the housing undersupply crisis is to increase supply “at all levels of the market”. Champion said that abolishing stamp duty for FHBs would help more young people to build their first homes.
The Minister for Housing and Urban Development continued that the South Australian government would have more information on the measures it would be taking to address the housing crisis later this month at the Premier’s Housing Roadmap.
Will Frogley, the CEO of Master Builders SA, also said on the updated stamp duty exemption: “This is a great day for any South Australian who dreams of owning their own home. It’s also a great day for builders, tradies, suppliers, apprentices and all of the more than 80,000 South Australians directly employed in our industry.
“As house prices have risen over the years so too has stamp duty. This vital policy change by the Malinauskas Labor Government will incentivise South Australians to build their own home, fuel job creation and keep our economy strong.”
The announcement follows the Victorian government’s abolition of commercial stamp duty to free up costs for businesses, set to come into effect from 1 July 2024.
Speaking with The Adviser, Mortgage Business sister brand, Steven Ragany, the Finance Brokers Association of Australia’s (FBAA) head of commercial and asset finance, said that brokers should be across the reforms to ensure they are able to “spread the load”.
New housing development in Adelaide suburbs
To further ease housing supply constraints, the South Australian government also announced that the 2024–25 state budget will allocate $576 million to build 1,941 homes.
The state government said that $425 million of the total allocation will be spent on redeveloping land in Seaton (approximately 36 hectares) to construct 1,315 homes, including houses, town houses, and apartments.
According to the South Australian government, 30 per cent of the homes built will become social housing and 15 per cent to be affordable housing.
The broader community will be able to provide feedback on the draft plans in community engagement sessions that will be held later this month, the government has said.
The remaining $150 million has been allocated to develop 80 new SA Housing Authority homes, with a minimum of 15 per cent of the homes to be affordable housing.
Malinauskas also said on new housing developments: “They will offer significant new public, social, affordable and market housing, injecting much-needed supply into the market. For 30 years state governments have been cutting the number of public homes. We are turning that around.
“We know housing is a key concern, and we will have more to say on this when we deliver our housing roadmap later this month.”
[Related: SA abolishes stamp duty for FHBs buying new homes]
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