Buying your first home has just gotten easier. Here’s why.
If you’re looking to purchase or build your first home in SA, you could be eligible for significant financial relief, thanks to the Government of South Australia.
The rising cost of living and ever-increasing house prices have moved the great Australian dream of home ownership beyond reach for many. But now, there’s help on the way.
In June 2023, the Government of South Australia released the state budget, which included a number of initiatives to help South Aussies looking to buy or build their first home.
So, if you are trying to get your foot in the door of your own home, look no further than this handy guide to grants, stamp duty, loans, land releases and all those other homeowner buzzwords flying around.
Stamp duty abolished
Let’s start with a definition: Stamp duty is a charge on certain documents and transactions, charged at either a flat rate or an ad valorem rate (based on the value of the transaction). Buying a house is one such transaction. Say you buy a new house for $600,000, then you’ll have to pay a stamp duty of around $26,830 on top of that (we worked that out using this handy calculator). That’s quite a lot of money to save in addition to a deposit.
The State Government is abolishing stamp duty for first home buyers building or buying a new home (this applies to new homes valued up to $650,000, and to vacant land valued up to $400,000), meaning thousands of South Aussies will be able to get a home of their own sooner.
As a result of this and the First Home Owner Grant (see below), an eligible first home buyer who enters into a contract to purchase a new home valued at $650,000 could receive relief of up to $44,580. That’s a big saving. This measure is estimated to assist around 3,800 first home buyers each year. Here’s more info if you need.
First Home Owner Grant
The property value cap for the First Home Owner Grant is also being increased to $650,000 (from $575,000). What does this mean? If you’re buying or building a new home (including a house, flat, unit, townhouse or apartment) in South Australia, and you plan on living in that home, you may be eligible for a grant of up to $15,000 – and there are no requirements as to how you use it! Check out all the eligibility requirements here.
Low deposit loans
The introduction of a new home loan through State Government organisation HomeStart enables eligible first home buyers building or buying a new home to take out a loan with as little as a two per cent deposit.
Hypothetically speaking, where you might have needed to save $100,000 for a house deposit only months ago (that’s 20 per cent of $500,000), you’ll now need to save only $10,000 (if you’re eligible). This is seriously good news in an economic climate where money is becoming almost impossible to save – these measures could take years off the time it takes to save for a home deposit.
HomeStart offers flexible interest rate and repayment options, has no account-keeping fees, enables free voluntary loan repayments, and enables repayment holidays so you can take a break from your home loan repayments when times are tough. HomeStart also offers a number of innovative loans for eligible borrowers that can reduce upfront costs and increase borrowing power, such as the Starter Loan and Advantage Loan. Learn more here.
As part of the Better Housing Future plan, the South Australian Government is fast tracking what will be the single largest release of residential land in the state’s history – set to deliver over 25,000 more homes for South Australians.
In addition to the rezoning of land at Hackham, sites at Concordia, Dry Creek, Noarlunga Downs, Aldinga, Sellicks Beach and Golden Grove have also been identified. This additional supply is expected to open the door to home ownership for more than 50,000 people both north and south of the city.
Long story short, this means a bunch of land and housing is set to hit the SA market, to lessen the demand (that’s driving up prices) on the current supply. In other words, there will be many more affordable options for first home buyers. Hooray!
I rent – what about me?
Listen to this Hot Topics podcast explain the SA housing crisis and how we’re helping renters.
If you’re not yet in a position to buy your first home (don’t worry, you’re not alone), changes have been implemented to better protect renters. Alongside recent reforms to ban rent bidding, the State Government is introducing more affordable bonds and relaxed restrictions around pet ownership.
Previously landlords were able to claim residential bonds equivalent to a maximum six-weeks’ rent when the weekly rent was $250 or greater. The threshold has been raised to $800 to ensure that, for the majority of rental properties in SA, only a four-week bond will be required.
Further, the government is making it easier for tenants to own a pet. Landlords can still refuse to allow a pet if they have a justifiable reason such as the property lacking suitable space or fencing, or if the animal presents a public safety risk, but this is a big step in the right direction towards balancing the needs of tenants and landlords.