Abolishing stamp duty opens doors to home ownership for first-home buyers

New measures from the State Government are bringing South Australian first-home buyers closer to realising their dream.

Abolishing stamp duty will open doors to home ownership for thousands of eligible first-home buyers building or buying a new home.

The State Government has announced the measure as part of its A Better Housing Future package.

Stamp duty will be abolished for an estimated 3800 first-home buyers annually and will apply to new homes valued up to $650,000, with relief progressively phasing out for properties valued up to $700,000. For the purchase of vacant land on which a new home will be built, stamp duty relief will be abolished on land valued up to $400,000, with relief phasing out for land valued up to $450,000.

The property value cap for the $15,000 First Home Owner Grant is also being increased from $575,000 to $650,000.

The new measures mean eligible first-home buyers could save up to $44,580 if they enter into a contract to purchase a new home valued at $650,000.

For South Australians like Caleb Bifulco who are struggling to break into the housing market, the abolishment of stamp duty could be the key to finally realising their dream of home ownership. The 26-year-old has been “continuously saving” for a deposit since the age of 15.

“I’ve been brought up to save ever since I was really young so this is something I’ve always done,” he says. ‘When I started working and became independent, I prioritised moving out into my first home.

Caleb Bifulco is hoping the abolishment of stamp duty will help him to purchase his first home. Picture: Russell Millard

“I did have a few opportunities to buy pre-Covid but I wasn’t financially ready, whereas I’m more financially ready now but the price of homes has skyrocketed. Stamp duty made it really hard but now it’s no longer a factor, it makes being in my own home more achievable.”

Bifulco estimates he will gain up to $30,000 that would otherwise have gone on stamp duty and legal fees. “It’s a lot of money, especially when you’re buying your first home,” he says.

“It definitely opens up a lot of opportunities. That extra money means I can maybe afford a better home. With newer homes in that price range ($550,000 to $600,000) you’re often looking at a very small block, but maybe you can now afford a bigger block or you can get some extra luxuries or features.

“Or it means you’re not having to fork out for such a big loan. With interest rates going up, you need to have a bit of financial headroom to reduce the risk of not being able to service your loan and being put under financial stress.”

Bifulco is now looking to be in his home within three-to-six months. “I’m ready to move out and the stamp duty abolishment is going to help me achieve that goal,” he says.

In addition, South Australia is set to receive $135.8 million from the Commonwealth’s $2 billion Social Housing Accelerator program, which will bolster the Malinauskas Labor Governnment’s existing investment in easing South Australia’s housing crisis. The funding is expected to deliver a further 300 to 400 homes on top of the existing commitment to build an extra 564 public homes, stop the sale of 580 others and accelerate the release of 25,000 blocks across Adelaide’s north and south.

Dogged hunt for pet-friendly home

Kurai Sibanda with her dog, Olive. Picture: Russell Millard

Kurai Sibanda describes finding a pet-friendly rental property as “quite honestly the hardest thing” she has ever experienced.

The 22-year-old spent five months searching for a landlord willing to accept Sibanda and her kelpie dog, Olive, during which time she was forced to move back in to her parents’ home. “It was awful – I attended constant house inspections and received rejections just because of a dog,” she says. “I could only exclusively apply for houses that said pets may be considered and even then, since she’s a bigger dog, it was really hard. I had to give behavioural reports from daycare to show she’s a really good dog.”

Sibanda and three-year-old Olive have now lived in their rental property in Evandale for two years but she admits to lingering uncertainty at lease renewal time. “Last year when they were renewing the lease, I did worry,” she says. “The one thing they were quite stressed about was the back yard – had Olive dug any holes or messed it up. That worried me they may not let me re-sign but I’ve been very lucky.”

Sibanda welcomes the State Government’s introduction of more protections for tenants, including more affordable bonds, a ban on rental bidding to help ease soaring rental prices, longer tenancies, new rules around ending or not renewing a lease and more rights to own pets. “It’s amazing,” she says. “There is always a fear the landlord may say, ‘We want you out’ and there would be a three-month period of looking for a house in a good location that would allow me to have a dog.

“Olive is a part of my family and it’s beyond heartbreaking to think of having to give up your dog. These new protections offer more flexibility and it’s exciting there won’t be that pressure for pet owners. I’m pretty stoked.”

Financial savings boosts dream of buying

Kylie Palmer with daughter Stella and dog Charlie. Picture: Russell Millard

What once appeared to be a remote dream for new parents Kylie Palmer and partner Marcus is now much closer to reality.

The Plympton Park couple – who welcomed daughter Stella to the world eight weeks ago – believe the State Government’s move to abolish stamp duty will play a crucial part in helping them off the rental roundabout and into their own home.

Together for a few years, the Palmers became “really serious” about saving for a home deposit about 12 months ago, but factors such as the spiralling cost of living, rental payments – and Stella’s arrival – have made it a challenge.

“We were putting money aside but we were very aware that it might never actually have been used for a house,” Mrs Palmer says.

“It just seemed to be getting harder and harder. We were waiting for that bubble to burst, but it didn’t seem very likely any time soon.”

However, the 35-year-old says the abolition of stamp duty would “instantly” boost their home ownership aspirations.

“That’s money that’s now freed up for us,” she says.

Mrs Palmer, an executive assistant, says it is important for the family to finally have the opportunity to purchase their own home.

“It’s important for security – knowing we’ve always got a roof over our heads and somewhere to go that can’t be pulled out from under us when the lease ends.

“We don’t want to be left trying to figure out where we might need to be moving to next.”

Originally published as Abolishing stamp duty opens doors to home ownership for first-home buyers