Stamp duty abolished for first-home buyers building or buying new houses up to $650k

New homes, cut-price deposits and stamp duty dumped for first-home buyers – the state budget aims to get people into their own home. See if you’re eligible.

First-home buyers who build or buy a new home valued up to $650,000 will no longer have to pay tens of thousands of dollars in stamp duty.

And more people are set to receive the $15,000 first-home buyer grant.

A $147.3m funding boost in the state budget is expected to help about 3800 first-home buyers each year over the next four years.

“Young South Australians feel like home ownership is out of their reach and this budget puts it back within their grasp,” said Treasurer Stephen Mullighan.

“Abolishing stamp duty for first-home buyers keeps their dreams of home ownership alive.”

Anyone signing a contract from today to buy vacant land worth up to $400,000, or to build a home for up to $650,000, will not have to pay between $18,830 and $29,580 in stamp duty costs.

Relief will be progressively phased out for land up to $450,000 and homes up to $700,000.

More people will be eligible for the first-home buyers grant as the property value cap is lifted from $575,000 to $650,000, bringing it closer to Adelaide’s median house price of $675,000.

Valuer-General data shows the average land allotment price is less than $300,000.

First-home buyers Zac, 24, and Hayley Duke, 23, are living with Hayley’s parents Kym and Cheryl Letton and are set to build a home with Hickinbotham at Roseworthy Picture: Keryn Stevens

Mr Mullighan said affordable house and land packages were available in council areas including Charles Sturt, Port Adelaide Enfield and Onkaparinga.

Asked if the construction industry was capable of delivering enough new homes to meet demand, Mr Mullighan said there had recently been a “significant drop-off” in housing approvals, housing finance commitments and dwelling commencements.

“There are many people who are now not going to make a decision to build or to renovate homes because of the cost of finance, because interest rates have gone up so much,” he said.

“We think providing this really significant package of first-home buyer support is going to provide a floor of activity in the housing construction market as they return to slightly below trend construction levels.”

The full $474.7m suite of housing measures in the budget includes:

FAST-TRACKING the release of more than 25,000 blocks of land north and south of Adelaide.

BUILDING an extra 564 Housing Trust homes and stopping the sale of 580 properties.

BUILDING 700 other affordable homes through a national housing agreement, in suburbs including Bowden, Prospect and Playford.

DEVELOPING homes for key workers like teachers, police and nurses in five regional locations.

REDEVELOPING the CBD Franklin St bus depot to create 392 apartments, including 137 affordable and social housing options.

OFFERING a new home loan option through HomeStart requiring only a 2 per cent deposit.

This would reduce the amount required to purchase a $650,000 home from $130,000 for a standard 20 per cent deposit to $13,000.

More people will also become eligible to access loans through HomeStart when the annual income cap is lifted from $65,000 to $75,000 for singles and from $90,000 to $100,000 for couples.

Hayley Duke, 23, and husband Zac, 24, are among the many young South Australians struggling to break into the housing market.

The pair, married in March, have purchased land in a housing development at Roseworthy and are living with Mrs Duke’s parents while they save to build with Hickinbotham on the vacant block.

“We’re going to have put away every cent that we possibly can,” said Mrs Duke, who is a high school teacher.

The couple are yet to sign a build contract and not having to pay stamp duty on their new home would be a welcome relief, they say.

“There’s already so much money going into this (investment). That’s one less thing we have to worry about in terms of what it’s going to cost,” Mrs Duke said.

“We want to build a forever home, not a tiny house that we have to move out of in a few years because we’re having kids.

“Unfortunately the houses that fit a family now are very, very expensive. It’s ridiculous.”