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SA Premier Peter Malinauskas has revealed the state's upcoming budget will see property value ceilings for stamp duty exemptions and the First Home Owner Grant axed.
All first home buyers who buy or build a new home in the state, whether that be an apartment, townhouse, or house, will be better off on account of the change.
Those buying existing dwellings will still pay stamp duty and won't be eligible for the $15,000 grant.
"Every new home built in our state benefits the rest of the housing market," Mr Malinauskas said.
"Every first home buyer that can move into a new home means one less buyer or renter competing for existing stock."
Previously, first time buyers spending more than $650,000 on a new home or more than $400,000 on vacant land in SA would be ineligible for the grant and forced to pay stamp duty.
That threshold is more than $100,000 lower than the median dwelling price in Adelaide as of 31 May - $757,448, as per CoreLogic data.
Property prices in the state's capital have risen more than 14% over the last 12 months, with the median value now nearly $290,000 higher than it was prior to the pandemic.
The existing stamp duty exemption was instated in SA's 2023-24 Budget.
Including the $15,000 First Home Owner Grant, a first time buyer purchasing or building a new home worth $750,000 will be more than $50,000 better off on the back of today's news, the state government said.
First home buyers building a new home can also take advantage of SA's 2% deposit home loan, available through HomeStart.
It allows eligible buyers to enter the market with a smaller deposit without paying lenders mortgage insurance (LMI).
To access the state government scheme, buyers must purchase a house and land package from a HomeStart building partner and live in the residence once it's finished.
Of course, first home buyers elsewhere might be able to turn to the Home Guarantee Scheme to get into the market with a 5% deposit without paying LMI.
The changes are expected to cost the state $30 million over four years and bolster its supply of housing.
The state's 2024-25 Budget will be revealed on Thursday.
Queensland to follow?
Today's news from SA follows similar whispers from Queensland ahead of the Sunshine State's election later this year.
Queensland opposition leader David Crisafulli has vowed to adjust the stamp duty exemption threshold in the state if the Liberal National Party wins power in October.
Currently, first home buyers spending more than $500,000 on a home or $400,000 on vacant land are required to pay stamp duty.
That's the lowest value threshold of any state or territory that offers a stamp duty exemption, with the exception of Western Australia.
That's despite Brisbane's median dwelling price officially overtaking that of Canberra last month, making Brisbane the second most expensive capital city in which to buy property.
Brisbane's median dwelling value is now $843,231, higher than Melbourne's $780,437 but lower than Sydney's $1,156,020.
The Property Council of Australia recently called for the Queensland First Home Owners' Grant to be offered to those buying or building new homes worth up to $1,000,000.
Right now, Queensland's First Home Owners' Grant offers $30,000 to those buying or building a new house, unit, or townhouse worth less than $750,000.
The Property Council also argues the state government should introduce stamp duty concessions for all buyers purchasing off-the-plan apartments.
"Failure to review the critical role that taxes and charges play in pushing housing affordability beyond reach, will see Queensland fail to deliver on our social obligations to ensure that every Queenslander has access to affordable, fit-for-purpose housing," Property Council Queensland executive director Jess Caires said.
Will stamp duty relief help governments meet housing targets?
The Property Council argues Queensland's current tax model won't allow the Sunshine State to meet its target of building a million new homes by 2046.
SA housing minister Nick Champion said the expanded stamp duty concessions revealed today will help the southern state meet its own housing target, to be announced later this month.
"The key to addressing the housing crisis is increasing supply at all levels of the market and this important budget announcement will help more young South Australians build their first home," Mr Champion said.
Meanwhile, the Federal Government's National Housing Accord aims to see 1.2 million new homes built over the five years from July.
Industry experts have questioned whether that target is realistic, given building approvals have lagged in recent times.
"Addressing tax, planning, land, and regulatory constraints on the housing industry is the only hope of reaching state and national housing targets in coming years and addressing the country's housing crisis," Housing Industry Association senior economist Tom Devitt said late last month.
"State and federal policymakers need to incentivise local authorities to accelerate the release of shovel-ready land and permit higher density development in existing suburbs near jobs and transport."
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