Stamp duty abolition just the start of savings for first home buyers

General Housing

Stamp duty abolition just the start of savings for first home buyers

Peter Malinauskas MP Premier

Stephen Mullighan MP Treasurer

South Australian first home buyers can reduce the upfront deposit and costs required for the purchase of a new home by up to $161,580, under a suite of State Budget measures delivered by the Malinauskas Labor Government to help more people into the housing market. For first home buyers, the State Budget abolishes stamp duty on the purchase of a new home valued up to $650,000, or vacant land valued up to $400,000 purchased to build a new home. It also expands eligibility for the existing $15,000 First Home Owner Grant to new homes valued up to $650,000. In addition, the Malinauskas Government has announced that eligible first home buyers who purchase a new property can apply for a new 2 per cent deposit home loan through HomeStart from 1 July 2024. The loan could wipe years off the time it will take to save for a standard 20 per cent deposit. Together, the budget measures can reduce the upfront deposit and costs required to purchase a home for a first home buyer by almost $115,000 on the purchase of a $450,000 new home, or more than $160,000 on a $650,000 new home.

Unlike some commercial lenders, HomeStart does not require borrowers take out Lenders Mortgage Insurance, which can add more than $10,000 to the cost of purchasing a home. Targeting these first home buyer savings for new builds aims to assist supply of new homes and is intended to improve affordability for first home buyers, while ensuring government support is not simply inflating the value of existing properties. The measures will also help support construction activity, which is starting to slow as the COVID stimulus spike wears off. The support for first home buyers is part of a $474.7 million package in the State Budget which supports the delivery of 3,600 new homes over five years and reduces the cost of housing for around a further 14,000 new homes, including: – Delivering the first substantial increase to public housing in a generation – building an additional 564 public homes and stopping the sale of 580 others; – Fast tracking the single largest release of residential land in the state’s history – more than 25,000 new blocks across the north and south; – Delivering 700 additional affordable homes under the National Housing Accord; Developing 111-129 Franklin Street to deliver more than 130 social and affordable apartments; – Delivering targeted reforms to rental laws including banning rent bidding; – Delivering new key worker housing through a new Office for Regional Housing in Renewal SA.

Quotes attributable to Peter Malinauskas Nothing is more important than a home. It delivers safety, security and somewhere to raise a family. It’s a fundamental prerequisite for full economic participation. We’re giving more South Australians the opportunity to own their own. An upfront deposit and cost reduction of more than $160,000 is significant. It means more people can save a deposit sooner. The abolition of stamp duty means a first home buyer can pay a smaller mortgage than would otherwise be the case. Importantly, these carefully calibrated measures, coupled with the biggest single land release in the state’s history will help boost housing supply, easing the rental squeeze for others in the process.

Quotes attributable to Stephen Mullighan For too long, too many South Australians have started saving a deposit for their first home, only to watch on as that dream drifts further and further away. We’re not giving up on those people. By abolishing stamp duty on new homes, broadening the eligibility for existing grants and offering this low-deposit loan for new builds, we’re giving first home buyers a serious leg up. And by directing this support to new homes, we’ll help ease pressure on the rest of the market.

Quotes attributable to HomeStart CEO Andrew Mills HomeStart is focused on making sure we can create opportunities for more South Australians to buy a home sooner. By taking action to reduce the upfront deposit and costs for first home buyers it will help many more people to achieve their dream. We look forward to working with the housing industry on helping many more people build a new home in coming years.

Quotes attributable to Master Builders SA CEO Will Frogley This is a great day for South Australians who dream of building their own home. Stamp Duty is the largest taxation liability when purchasing a new home, and a major impediment to home ownership and economic growth. Building new homes not only builds stronger communities, it provides virtually unrivalled ‘bang for the buck’. According to the ABS, residential building has the second highest economic multiplier out of all industries. This announcement means more South Australians will be able to build their own home, more work for builders, tradies, apprentices and suppliers, and more jobs and economic activity across the state. A report by Hudson Howells commissioned by Master Builders SA found that in a Low Case Scenario abolishing stamp duty on homes up to $650,000 would deliver an extra 1,000 homes, 4,693 additional FTE jobs and a Net State Government gain of $24 million.