State Government’s $10,000 pre-construction grant to speed up apartments built in Adelaide CBD

IT’S a good time to buy an apartment if you’re a first home buyer. But if you’re a foreign investor, have a look at our commercial and industrial properties, says the Treasurer.

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FIRST home buyers who have their sights set on a CBD apartment could save more than $40,000 if they sign contracts in the next three months on buildings yet to be built.

It comes as the State Government hopes to limit foreign buyers driving up prices in South Australia’s residential property market by introducing a new levy.

In Thursday’s Budget speech, Treasurer Tom Koutsantonis revealed a number of property developments had not sold enough apartments off the plan to start construction. But now any buyer of an off-the-plan apartment contract who signs before September 30 will be eligible for a $10,000 pre-construction grant, to encourage prospective buyers and speed up construction.

On top of the grant, other incentives for off-the-plan buyers include:

STAMP duty concession of up to $15,500 has been extended for another year.

FIRST Home Owner Grant of $15,000 for new residential property.

Off-the-plan apartment buyers will now be eligible for a $10,000 pre-construction grant.

That means a first home owner buying a new apartment could save up to $40,500.

People who have previously owned a home will be eligible to receive the stamp duty concession and new grants up to $25,000. It is expected 180 purchasers of property values capped at $575,000 will qualify for the $10,000, to be paid at settlement.

The initiative is designed to limit urban sprawl, support jobs and economic growth through construction, and increase city vibrancy — with the majority of developments centred in the CBD and fringe suburbs.

Treasurer Tom Koutsantonis said the $10,000 grant, combined with the Adelaide City Council’s scheme to give owner/occupiers a “five-year holiday from council rates” was a great incentive to buy off the plan.

“It’s our responsibility as a state to make sure people can buy an apartment where they grew up,” he said.

As property prices in Melbourne and Sydney continue to soar due foreign investors buying up inner city properties — the State Government has introduced a four per cent levy on SA residential property bought by foreign buyers and temporary residents from January 1, 2018.

“I don’t want my daughters to have to buy further away from us because they can’t afford it,” Mr Koutsantonis said.

The levy aimed at “protecting locals” assumes foreign buyers will be discouraged from buying property in SA, despite it being one of the lowest state surcharges imposed.

The highest charge is in NSW at eight per cent, Victoria seven per cent, Western Australia four per cent and Queensland three per cent.

Mr Koutsantonis, who instead wants foreign investors to buy commercial and industrial property — which is exempt from the levy — to boost the state’s economy, defended the possibility of the charge discouraging foreigners from investing in SA altogether.

The surcharge is expected to generate $13.3 million in revenue during the first full-year it is applied.  

BUDGET REACTION

Name: Aleksandra Rees, 27

Occupation: Lawyer

Lives: North Adelaide

Marital status: Married

Voted last election: Liberal

Planning to vote next time: Labor

WISHLIST

1First Home Owner Grant: “At the moment concessions are only for new properties and new builds in some developments, but I’m looking to buy a character home to add value to and there are no incentives for that. The First Home Owners Grant needs to be reinstated for all properties.” NO

 

2 Reduce stamp duty: “We’ve got the highest stamp duty in the country and it needs to be reduced. Why here, where property prices are lower than interstate, do we still pay the highest stamp duty?” NO

 

3 More money for hospitals and public health: “I was very glad to see some injection into the Queen Elizabeth and other public hospitals, because we’ve recently had family members use the public hospital system and it needs more money. We also need more money spent on public health to prevent diseases and fund vaccines.” YES

 

4 Moderate infrastructure spending: “They’re doing a good job in terms of infrastructure spending but I think there’s too much being spent at one time. The town’s just not flowing. They need to spread it out because it’s causing congestion areas.” NO