Stamp duty axed entirely for first-home buyers of new builds in SA

The SA government has abolished the property value caps on the $15,000 First Home Owner Grant and the first-home buyer stamp duty exemption on new homes in a move that could save first-home buyers tens of thousands of dollars.  

The measures are aimed at boosting new home building and providing a leg-up to aspiring homeowners in a state where home values have surged by double digits over the past year.

One of the top performing capital cities, Adelaide home prices have jumped more than 14% since May last year according to the latest PropTrack Home Price Index, and almost 12% in the regions.

The measures will apply to first-home buyers who purchase a new home, an off-the-plan apartment, a house and land package or vacant land to build a new home. 

It comes ahead of the state government’s 2024-25 state budget, making it the first state to remove stamp duty entirely for first-home buyers who are buying or building a new home.  

The change goes a step further from the last state budget, when the government removed stamp duty for first-home buyers buying or building a new home worth up to $650,000.

SA Premier Peter Malinauskas said every new home built in the state benefited the rest of the housing market. 

“We are amid a national housing crisis borne of successive governments failing to do enough to build new homes,” he said.  

“Every first-home buyer that can move into a new home means one less buyer or renter competing for existing stock.”  

The median home price in Adelaide has increased 14.49% year-on-year to $748,000 as of May 2024. Picture: Getty

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Those wanting to purchase an existing home will still be able to get the first-home buyer stamp duty exemption for homes worth $650,000 or less. There is also a stamp duty discount for existing homes valued between $650,000 and $700,000.  

PropTrack senior economist Paul Ryan said stamp duty played a big part in limiting access to homeownership for first-home buyers. 

He said it was a good move to target incentives at the construction of new homes, but noted cash grants such as the First Home Owner Grant could work to increase home prices. 

Master Builders SA chief executive Will Frogley said it was a great day for South Australian first-home buyers.  

“As house prices have risen over the years, so too has stamp duty,” he said.  

“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 stamp duty exemption and grant changes will cost $30 million over four years. 

It’s the latest housing tax change from state and territory governments which have been looking at ways to reduce the tax burden on first-home buyers.  

Last month, the Western Australian government extended its stamp duty exemption in this year’s state budget, making it slightly easier for first-home buyers.  

The home value cap on the stamp duty exemption was increased to $450,000, up from $430,000.  

The median home price in Perth was $699,000 in May, up more than 20% year-on-year.  

First-home buyers in South Australia who build or buy a new home may be eligible for a $15,000 grant and avoid paying any stamp duty. Picture: Getty

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The Tasmanian government expanded its first-home buyer stamp duty exemption earlier this year after winning the recent state election.  

First-home buyers previously received a 50% stamp duty discount in Tasmania, however the government committed to removing stamp duty entirely for first-time buyers purchasing any home valued up to $750,000. 

A recent PropTrack-e61 Institute research report found that stamp duty costs have grown at least fourfold for median-priced homes in Australia’s capital cities compared to average incomes since the early 1980s.