South Australia Scraps Stamp Duty for First Home Buyers of New Homes

First home buyers in South Australia who purchase or build a new home will no longer pay any stamp duty, regardless of the property’s price, under changes confirmed in the 2024–25 State Budget handed down on 6 June 2024.

The measure, flagged by Premier Peter Malinauskas two days earlier, removes the property value caps that previously limited stamp duty relief for eligible first home buyers.

What has changed

According to RevenueSA, the value caps are removed for contracts entered into on or after 6 June 2024 to purchase a new home, or vacant land on which to build a new home. For those contracts, full stamp duty relief now applies to all eligible new homes and land, with no upper price limit.

The relief applies to newly built homes and to land bought to build one, while established homes remain outside the scheme. Before the Budget, first home buyers were exempt only where a new home cost $650,000 or less, a threshold introduced in the previous year’s Budget.

The property value thresholds attached to the $15,000 First Home Owner Grant have also been removed, and the grant has been extended for a further four years.

Why the cap came off

InDaily reported that only about 1,800 of an estimated 3,000 eligible first home buyers had benefited from the $650,000 threshold, as rising house prices and higher interest rates pushed many new homes above the cap. The government estimates that removing the ceiling will help an additional 1,200 buyers over four years.

The combined cost of abolishing stamp duty for this group and extending the First Home Owner Grant is put at $30 million over four years. Master Builders SA estimated that the changes could save a first home buyer about $50,000 on a $750,000 new home.

Tighter eligibility

The Budget also tightens the rules on who counts as a first home buyer. Under the Statutes Amendment (Budget Measures) Bill 2024, introduced to Parliament on Budget day, buyers or their spouse or domestic partner who own, or have previously owned, residential property anywhere in Australia will not qualify for the relief, even if they never lived in that property or lived there for less than six months.

Relief from the foreign ownership surcharge for first home buyers is also being withdrawn. To qualify for stamp duty relief, at least one owner must be an Australian citizen or permanent resident, and the full surcharge will apply to any interest transferred to a foreign person. These tightening measures apply to contracts entered into from the date the Bill receives assent, while removal of the value cap took effect immediately.

Supply alongside demand

The stamp duty change sits alongside a push to increase housing supply. The government announced $425 million to redevelop a 36-hectare site at Seaton in Adelaide’s west, replacing 388 ageing public housing properties with 1,315 new homes, comprising 865 houses and townhouses and 450 apartments. It also committed $150 million to a project at Noarlunga in the south, delivering more than 600 homes. Both projects include an affordable housing component of at least 15 per cent.

The Premier framed the package around supply, arguing that the only serious way to address a housing crisis is to build more homes. Linking the stamp duty concession to new construction, rather than established homes, is intended to direct first home buyer demand towards additional housing stock instead of competition for existing dwellings.

What it means for buyers

• Contracts for an eligible new home or vacant land signed on or after 6 June 2024 attract no stamp duty for qualifying first home buyers, at any price.
• The $15,000 First Home Owner Grant no longer carries a property value threshold.
• Established homes are not covered by the new exemption.
• Buyers who have previously owned residential property in Australia, even without living in it, are excluded once the amending Bill takes effect.