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Raine & Horne applauds stamp duty abolition for SA first homebuyers and urges developer cooperation

June 14, 2024

The South Australian Labor Government has officially abolished stamp duty for all first homebuyers who buy or build a new home from 6 June 2024, and extend the First Home Owner Grant to all eligible first homebuyers as part of the 2024-25 Budget.

To further boost housing supply and help more South Australians into home ownership, the 2024-25 Budget will eliminate property value thresholds for both the stamp duty exemption and First Home Owner Grant at a cost of $30 million over four years.

With the abolition of property value limits, a first homebuyer who purchases a new dwelling broadly in line with the median house price of $750,000 will receive a benefit of over $50,000, including the First Home Owner Grant of $15,000[i].

The stamp duty exemption will be available to all first home buyers who purchase a new home (including a house, flat, unit, townhouse or apartment), an off-the-plan apartment, a house and land package or vacant land to build a new home.

This initiative builds on the tax relief announced in the 2023-24 Budget, where the Malinauskas Labor Government abolished stamp duty for first home buyers purchasing a new dwelling valued up to $650,000 and aligned the property value cap for the $15,000 First Home Owner Grant to this limit.

First home buyers building a home can also save thousands with a 2% deposit home loan available through HomeStart. Announcing the first homebuyer initiatives SA Premier Peter Malinauskas said, “We are amid a national housing crisis borne of successive governments failing to do enough to build new homes.

“In the last budget, we abolished stamp duty for some first homebuyers who build new homes. Now we are making that tax relief available to all of them. 

“Every new home built in our state benefits the rest of the housing market. Every first homebuyer that can move into a new home means one less buyer or renter competing for existing stock.” 

James Trimble, General Manager SA, Raine & Horne, welcomed the initiative and said first homebuyers are already switching their attention from established dwellings to new properties. “With house prices in South Australia rapidly rising, many first homebuyers only have to save a 20% deposit rather than also allowing for all the other costs of homebuying such as stamp duty. If you’re saving around $20,000 annually towards the cost of the median house price of $750,000, these incentives will get you into a new home roughly 2.5 years faster.

“It also means the average age of first-time homebuyers in South Australia, which is now around 34 years, will drop back to 31.5 years, which is another positive outcome from these incentives.”

 James added that the government is doing its best to kickstart residential property development in South Australia. “We don’t have enough properties right now. 

 However, James pointed out that the challenge with building new homes is that they are often not located in the suburbs and towns where South Australians have grown up. “Moving away from familiar neighbourhoods, friends, networks, and facilities to a new property five suburbs away is not appealing to everyone, especially older empty nesters.

 “We therefore also need some stamp duty relief to encourage empty nesters to downsize from their four or five-bedroom houses into more appropriately sized homes. 

 This move would create the supply needed for the next generation of upgraders to move into larger homes that are more appropriate to their family, work and lifestyle needs,” he said. 

James concluded, "We welcome more first home buyers into the market, as we know the property ladder begins with the first step. However, we caution against developers increasing prices to offset the additional buying power of first home buyers.”

 For a free and no-obligation appraisal of your property, reach out to your local Raine & Horne agent today to discover the true value of your home.

[i] https://www.premier.sa.gov.au/media-releases/news-items/stamp-duty-officially-abolished-for-all-first-homebuyers-who-build-new-homes