Stamp duty revenue could be used to help first home buyers — but measures must be targeted at right people: Treasurer

Stamp duty revenue could be funnelled onto further assistance for first home buyers – but the Treasurer says the government must be careful to make sure help reaches the right people.

The stabilisation of the South Australian housing market could open the door for the state government to funnel some of $1.12bn in stamp duty revenue into further assistance for first home buyers.

But Treasurer Stephen Mullighan said it was critical any measure included in the June state budget was targeted at helping the right people, and warned that government assistance must not end up “pouring petrol onto the fire of price inflation in the housing market”.

The market is forecast to cool significantly this year, with a total 45,400 transactions expected to have taken place by the end of June.

That figure – which Mr Mullighan said is “about par for where it should be” — comes off the back of record highs of 52,700 in 2020-21 and 56,900 in 2021-22.

“That increase in activity was what was driving the extraordinary house price increases,” he said.

Treasurer Stephen Mullighan. Picture: Matt Loxton

“The price increases have basically stopped now, and rather than house price falls, they’ve stabilised at a new, higher level.”

The boom led to a surge in stamp duty revenue for the government, which collected $809.8m in 2019-20, $1bn in 2020-21 and $1.35bn in 2021-22.

At the December Mid-Year Budget Review, the 2022-23 estimate was revised down to $1.12bn.

At the time he delivered last year’s state budget, Mr Mullighan said the government had decided against funding extra assistance for first home buyers because “we didn’t want to do anything which would further stimulate those property prices at the level of the market first home buyers are trying to get into”. The extra stamp duty revenue was instead used to support the health system.

Asked whether the government would consider such measures this year, following the stabilisation of the market, Mr Mullighan said several options were on the table.

“What we’ll think through for the budget is whether the market conditions are a bit more amenable to providing any further support for first-home buyers,” he said

But help may not come in the form of government grants.

“If you give everyone an extra x thousand dollars, whatever the level of financial assistance is, that just gets pocketed by the vendor … all that does is add to the sale price of the home.

“Whereas I think what we’re trying to do is actually reduce the out-of-pocket costs for people who are getting into the housing market.”

Outlining other measures that help first home buyers, Mr Mullighan said facilitating access to cheap and available finance would help more people borrow “because there is a lot of people who just simply can’t get a home loan”.

He said another crucial step was getting more housing onto the market at a price point accessible to first home buyers.

The state budget — Mr Mullighan’s second as state treasurer — is due to be handed down on June 15.