Stamp duty axed for SA first home buyers

The Malinauskas Government will abolish stamp duty for all first home buyers purchasing or building a new home, with the State Budget move aimed at increasing supply during the housing crisis.

Jun 04, 2024, updated Jun 04, 2024
Photo: Tony Lewis/InDaily

Photo: Tony Lewis/InDaily

Announcing the policy today ahead of Thursday’s budget, Premier Peter Malinauskas called it “one of the biggest shakeups and tax reductions that we’ve seen when it comes to the cost of building and land in our state in its history”.

The move means all first home buyers building a new home or purchasing a newly built home will not have to pay stamp duty – regardless of the value of the new property.

It comes after last year’s state budget abolished stamp duty for all first home buyers building or purchasing a new home worth up to $650,000.

The state government estimates the removal of the value cap will help an additional 1200 buyers over the next four years.

It will also extend the $15,000 first homeowner grant for another four years. This, combined with the expanded stamp duty abolition, is expected to cost the budget $30 million over the next four years.

Malinauskas said axing stamp duty was only targeted at new builds because the government has the “very explicit objective” of increasing housing supply.

“The only serious way that you address a housing crisis is by increasing housing supply,” the Premier said.

“We’re going to abolish a tax that holds up the building of more supply.”

Last year’s abolition of stamp duty for new builds up to $650,000 was estimated to help 3000 first home buyers.

But Treasurer Stephen Mullighan said today that only 1800 had benefitted due to house price growth and interest rate rises.

He said abolishing the price cap means the government does not have to keep reviewing the policy.

“We know we needed to change the policy to keep it more contemporary with how the market’s moving,” Mullighan said.

“We didn’t want to be in the same situation every six or 12 months having to re-evaluate this policy, creating that uncertainty for first home buyers as to whether they were going to get that benefit.”

The Opposition last week called on the government to lift the stamp duty exemption on new builds from $650,000 to $750,000.

“We’re pleased Peter Malinauskas listened to the Opposition’s calls to lift the current threshold for stamp duty relief for first home buyers,” Opposition leader David Speirs said.

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“Today’s announcement is an acknowledgement that the current scheme has been a spectacular failure as the eligibility criteria is far too restrictive.”

But the Liberal Party also wanted a $10,000 reduction on stamp duty for first home buyers purchasing an established home, which the government is not pursuing.

“Not all first home buyers can or want to build a new home,” Speirs said.

“A Speirs Liberal Government elected in 2026 is committed to providing stamp duty relief for first home buyers who wish to purchase an existing home.”

Mullighan claimed that extending stamp duty relief to existing homes would drive up home prices.

“The first home buyer doesn’t benefit – it’s the vendor of the house, the seller of the house who ends up trousering the extra benefit.

“We’re here to help first home buyers, not people who have already had the good fortune to be in home ownership for some period of time.”

The government also announced today that it will spend $425 million to deliver 1315 homes on a 36.4 hectare plot in Seaton and $150 million for 626 new homes across two vacant parcels in Port Noarlunga and Noarlunga Downs.

The Seaton site – located between Frederick Road, Glenburnie Street, West Lakes Boulevard and Tapleys Hill Road – is already home to 388 public homes which will be replaced “on a 1:1 basis” with a mix of houses and apartments, the government said.

The final development will comprise 865 houses and townhouses and 450 apartments, with at least 15 per cent to be designated as affordable housing (between $417,000 and $479,550) and 30 per cent as social housing.

The Port Noarlunga and Noarlunga Downs developments will deliver 80 new SA Housing Authority homes, with 15 per cent of the 626 total new builds to be affordable housing.

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