The Malinauskas Government announced on Tuesday the move to axe stamp duty for all first home buyers building or purchasing new properties regardless of the price.
This means the value cap of $650,000 for SA’s stamp duty concession currently in effect since last year will be lifted, and all eligible first new homes will be exempted.
“In the last budget, we abolished stamp duty for some first home buyers who build new homes,” SA Premier Peter Malinaukas said.
“Now we are making the tax relief available to all of them.”
The $30 million policy will be part of the state’s 2024-25 Budget that will be handed down on Thursday.
Stamp duty exemption aims to increase SA housing supply
The stamp duty exemption will be available to all first home buyers buying a new dwelling or vacant land to build a new home.
Buyers purchasing existing properties are ineligible, as the government aims to address the supply constraints through this measure.
“Every new home built in our state benefits the rest of the housing market,” Mr Malinauskas said.
“Every first homebuyer that can move into a new home means one less buyer or renter competing for existing stock.”
Fresh data released by SQM Research revealed Adelaide as the second tightest property market, with total listings down 7.9% over the year to May.
There were only 8,736 in the city, lower than last year’s 9,483.
Compared to other capitals, there were also fewer new listings in Adelaide, with only 4,182 in the month prior (up 1.9% month-on-month).
Houses in the city are snapped up fast and thus spend less time in the market, with old listings down 20.5%.
That said, supply and the construction of new supply is likely to remain at a nadir for a while.
The number of loans to owner occupiers for the construction of new dwellings in SA has been low, at 245 for March 2024 according to ABS figures. This is about a quarter of the level when compared with March 2021.
The purchase of newly constructed dwellings has also been down, with just 73 loans written in March, less than half the number of March 2021.
There were also just 819 private sector dwellings approved for construction in March, down from 1,535 in March 2021.
And to help first home buyers enter the property market
The newly enhanced stamp duty exemption is also expected to provide significant relief to first home buyers aiming to enter the increasingly expensive South Australian property market.
The property market in the southern state, particularly its capital Adelaide, has gone from strength to strength since the onset of the 2020 pandemic.
According to the latest PropTrack report, the median dwelling price in Adelaide has increased by 68.5% since March 2020.
In the year to 31 May alone, median home values in the city went up by 14.4% to reach $757,448.
Adelaide is currently the fifth most expensive capital city in which to buy a home, per the latest CoreLogic Home Value Index (HVI).
With the abolition of property value limits, a first home buyer purchasing a new dwelling broadly in line with the median value of $750,000 will receive a benefit of over $50,000, including the First Home Owner Grant of $15,000.
Photo by Vlad Kutepov on Unsplash
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