News & Tips
Stamp Duty Relief Set To Drive South Australian Land Market To New Highs
The South Australian Government’s decision to scrap stamp duty for first-home buyers purchasing a new home valued up to $650,000 is an inspired policy that will underpin a new wave of investment and migration to the State.
First-home buyers trying to enter the market, without the benefit of equity in an existing property, have been among the most disadvantaged by recent interest rate increases. Oliver Hume fully supports any initiative that reduces tax on buying property and gives this cohort of buyers the opportunity to get a foothold on the property ladder.
Together with a clear strategy to fast track the release of land for 23,700 new homes, South Australia is quickly becoming the model for tackling the current housing and affordability crisis that has engulfed all capital cities.
Stamp Duty Relief
The complete abolition of the stamp duty will apply to new homes valued up to $650,000, with relief progressively phasing out for properties valued up to $700,000.
For the purchase of vacant land on which a new home will be built, stamp duty relief will be abolished on land valued up to $400,000, with relief phasing out for land valued up to $450,000.
The property value cap for the $15,000 First Home Owner Grant has also increased to $650,000.
Notably, as a jobs and growth initiative, the stamp duty exemption does not apply to anyone buying an existing house or apartment, with only new home buyers eligible.
As a result of these measures, an eligible first home buyer who enters into a contract to purchase a new home valued at $650,000, on or after 15 June 2023, could receive relief of up to $44,580.
HomeStart Overhaul
To help first-home buyers save for a deposit, the Budget also made changes to the existing HomeStart program.
The Government will introduce a new home loan that will enable eligible first-home buyers building a new home to take out a loan with as little as a two per cent deposit. A fast-tracked approval process will also be implemented for eligible first home buyers to expedite the approval process to see them in their new home sooner.
In an environment where the inflation and cost of living pressures makes saving more challenging, the government should be applauded for removing one of the significant hurdles for first-home buyers.
When announcing the decision, South Australian Treasurer Stephen Mullighan said the move was aimed at helping more South Australians into home ownership while boosting the supply of new homes in the housing market.
That is precisely what it will do.
What it means for first home buyers
|
Purchase price |
Standard 20% deposit at a bank |
2% deposit HomeStart loan |
Stamp duty and FHOG benefit*^ |
|
$250,000 |
$50,000 |
$5,000 |
$23,955 |
|
$350,000 |
$70,000 |
$7,000 |
$28,830 |
|
$450,000 |
$90,000 |
$9,000 |
$33,830 |
|
$650,000 |
$130,000 |
$13,000 |
$44,580 |
Source: SA Government. *based on the purchase of a new home. ^includes benefit from FHOG if previously eligible.
Oliver Hume expanded into the South Australian market in 2021 on expectations the Festival State would become a magnet for buyers attracted to the strong local economy, affordable housing, South Australia’s outstanding liveability and a welcoming government.
Our entry into the State has exceeded all expectations, with the company currently involved in five different projects, including Springwood (Gawler East), Oakden Rise (Oakden), William Lakes (Gawler Belt), St Andrews (Andrews Farm) and Seacliff Village (Seacliff Park).
We will continue to expand our presence in South Australia to meet current and future demand and hope the State’s continuing success sends a strong message to other jurisdictions about the benefits of a vibrant, healthy and sustainable property development sector.
By Julian Coppini,
Oliver Hume,
CEO Project Marketing