Stamp duty axed for SA first home buyers

Big Changes for First Home Buyers: Stamp Duty Abolished for New Homes

The Malinauskas Government is making a bold move to support first home buyers and increase housing supply amidst the current housing crisis. In a significant policy shift, the State Budget will abolish stamp duty for all first home buyers who are purchasing or building a new home.

Premier Peter Malinauskas announced this policy, calling it “one of the biggest shakeups and tax reductions in the history of our state’s building and land costs.” This change means that all first home buyers who are building or buying a newly built home will no longer need to pay stamp duty, regardless of the property's value.

This new policy builds on last year’s state budget, which abolished stamp duty for new homes up to $650,000. The removal of the value cap is expected to help an additional 1200 buyers over the next four years.

Additionally, the government will extend the $15,000 first homeowner grant for another four years. This combination of policies is projected to cost the budget $30 million over the next four years.

Premier Malinauskas emphasized that this measure is aimed solely at new builds to address the housing supply issue. “The only serious way to address a housing crisis is by increasing housing supply. We’re going to abolish a tax that holds up the building of more supply,” he said.

Last year’s policy was estimated to help 3000 first home buyers, but due to rising house prices and interest rates, only 1800 benefited. Treasurer Stephen Mullighan explained that abolishing the price cap eliminates the need for constant policy reviews. “We needed to keep the policy contemporary with the market’s movements to avoid uncertainty for first home buyers,” he said.

The Opposition had recently called for an increase in the stamp duty exemption threshold from $650,000 to $750,000. Opposition leader David Speirs acknowledged the government’s response to their suggestion but criticized the current scheme as too restrictive.

However, the Opposition also advocated for a $10,000 stamp duty reduction for first home buyers of existing homes, which the government is not adopting. Speirs argued that not all first home buyers want or can afford to build new homes, promising that a future Liberal Government would provide stamp duty relief for those purchasing existing homes.

Mullighan countered that extending stamp duty relief to existing homes would only increase home prices, benefiting sellers rather than first home buyers.

In addition to the stamp duty changes, the government announced a $425 million investment to deliver 1315 homes on a 36.4-hectare plot in Seaton, and $150 million for 626 new homes in Port Noarlunga and Noarlunga Downs. The Seaton site will replace 388 public homes with a mix of houses and apartments, with at least 15% designated as affordable housing and 30% as social housing. The Noarlunga developments will include 80 new SA Housing Authority homes, with 15% of the total new builds being affordable housing.

This comprehensive approach aims to increase housing supply and provide significant support to first home buyers in South Australia.