First home buyers have been doing in tough in South Australia but changes to stamp duty brings new home, says David Titley.

There has been precious little good news for homeowners in the last year.

Twelve interest rate rises by the Reserve Bank of Australia has put a double whammy on the hip pockets of many families, already hit hard by rapidly rising inflation.

But first home buyers in South Australia have been given a break in the weather and could be forgiven for thinking Christmas has come early.

Desperate to stimulate the building market and ease pressure on soaring rental prices, the Malinauskas government has given first home buyers a substantial free kick by abolishing stamp duty.

It’s just the ticket for young people trying to break into the housing market who feel they have been watching their dreams slip through their fingers with every interest rate rise over the last 12 months.

But as always, there is a catch!

The SA budget announcement

The first home buyers announcement was part of Treasurer Stephen Mullighan’s 2023-24 State Budget.

The government scrapped stamp duty for first home buyers, as long as they are purchasing a new home valued up to $650,000.

It is squarely designed to keep housing affordability within the range of young people against a backdrop of skyrocketing house prices and interest rates.

“Right now home ownership has never felt further out of reach for young South Australians,” Mullighan said.

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

“This provides an incentive for more supply, creating a pipeline of work for the building industry for years to come.”

Premier Peter Malinauskas said he expects the move will assist as many as 3,800 first home buyers each year in a package costing $147.3 million over four years.

“Everyone deserves a home,” he said.

“Now, we’re taking the next step so that more people can own their own home.

“These reforms will slash almost $45,000 off the cost of an average new home for a first home buyer – making it easier for them to enter the market and cheaper for them to pay their mortgage.

“Importantly, this will also help stimulate new supply in the market, helping ease the housing crisis for everyone.”

But as always, there are qualifications and limits regarding who can take advantage of the new offer.

The detail

Firstly, it is critical to remember the offer applies only to first home buyers purchasing a new home.

There will be no stamp duty charged on new homes valued up to $650,000 or vacant land up to $400,000 when purchased to build a new home.

For a home worth $650,000, the stamp duty relief is worth $29,580.

That relief falls on a sliding scale down to zero for houses worth $700,000 and land worth $450,000.

The Budget has also raised the cap of the First Home Owner Grant (FHOG) from $575,000 to $650,000 for eligible properties from 15 June, 2023.

The FHOG is a payment of up to $15,000 to first home buyers buying or building a new home that will be their principal place of residence.

When combined with the stamp duty relief, it takes the total amount of assistance available for first home buyers to $44,580.

The government is also offering eligible first home buyers the chance to take out a loan with as little as a 2 per cent deposit.

They have also lifted the annual income cap for those eligible for this offer from $65,000 to $75,000 for singles and from $90,000 to $100,000 for couples.

This means that when purchasing a new home worth $650,000, a first-home buyer may now be eligible for rebates of up to $44,580 while needing a downpayment of only $13,000.

Get advice today

Wading your way through new entitlements while still trying to secure the best possible loan deal can seem overwhelming.

That’s why working with an experienced mortgage broker is so important.

Calder Finance Broking are specialists in the mortgage broking business.

We can help you extract the absolute most from your deposit, ensuring you take advantage of every possible government rebate while finding you the most competitive interest rate and deal into the bargain.

We also help our clients refinance and regularly achieve better rates – sometimes by as much as a full percentage point.

We can advise you on the most prudent mortgage strategies for your circumstances and ensure you are always taking advantage of the very best loan deal on the market.

We pride ourselves on leading our clients into the future with structure, financial stability and confidence. 

Contact us today to discuss all of your financial needs and concerns.

The information contained in this article is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.

Taxation, legal and other matters referred to on this website are of a general nature only and are based on Calder Wealth Management’s interpretation of laws existing at the time and should not be relied upon in place of appropriate professional advice. Those laws may change from time to time.

Calder specialises in wealth management with a focus on advice, investment, sustainability, insurance and finance.

Written by David Titley from Calder Finance Broking, for more information please visit the Calder Finance website. Please note that Calder Finance Broking Pty Ltd is a Corporate Credit Representative of BLSSA Pty Ltd ABN 69 117 651 760 ACL 391237.

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