The 2024-2025 South Australian State Budget has delivered plenty of optimism for First Home Buyers. A First Home Buyer looking to buy a new first home or build it, will now have greater capacity to enter the residential property market in South Australia with newly announced abolishment of stamp duty and removing the price cap for the First Home Owner Grant. This is really promising news for First Home Buyers facing a higher priced property market, rising costs to build, and increased interest rates.
No Stamp Duty for First Home Buyers in South Australia
Coming into effect on the 6th of June 2024, the SA Government will completely abolish stamp duty for First Home Buyers purchasing a new home. This is only applicable for contracts entered into on or after the 6th of June 2024. Previously stamp duty was only waived for first home buyers on new properties valued up to $650,000 or vacant land valued up to $400,000, which realistically wasn’t much of a benefit due to the price of new properties with substantial growth over the past 12 months. This is a major boost for those looking to enter the property market for the first time, enabling buyers to get more bang for their buck with their deposit.
A First Home Buyer purchasing a newly built home for $1,000,000, will now have reduced costs of up to $48,830. A First Home Buyer purchasing land for $500,000 and building their home would see reduced costs of up to $21,330. This will allow First Home Buyers to enter the market sooner by using more savings toward the purchase price of a property, rather than the additional State Fees & Charges.
Increased Property Value Cap for the South Australian First Home Owner Grant
Eligible First Home Buyers looking to buy or build a new home in South Australia can access up to $15,000 with the First Home Owner Grant. The newly announced State Budget has removed the property cap for the First Home Owner Grant. Previously the grant was restricted to properties valued up to $650,000 which didn’t come close to reflecting Metropolitan Adelaide’s median house price of $760,000 (March Quarter 2024). More First Home Buyers can now realistically access the grant to assist with buying or building an owner-occupied home. The increased price cap is more relevant to the current market, which has seen house prices and build costs increase substantially over the past 24 months.
How can this actually help a First Home Buyer using Bernie Lewis Home Loans?
If you’re interested in buying or building your first home in South Australia, then you will now need to save less for your deposit to assist with the purchase.
The $15,000 First Home Owner Grant and no stamp duty payable can save a first-time buyer significantly, and at a fairly competitive interest rate with a good lender.
For eligible applicants, deposit support can be obtained through the Home Guarantee Scheme and HomeStart (SA). This can reduce the deposit contribution for a first home buyer to as little as 2%-5% of a property price, with capacity to also avoid paying Lender’s Mortgage Insurance. However, purchase price caps do still apply to the Home Guarantee Scheme, with Metropolitan Adelaide and South Australian Regional Centres restricted to only $600K.
Low Deposit Options with HomeStart
With the help of HomeStart via their Low Deposit Loan product (97% loan), a First Home Buyer looking to buy a newly built property in Adelaide for the current median price, would be looking at the following scenario:
From June 6 2024
Current median Metropolitan Adelaide house price = $760,000
Stamp duty payable = $0
First Home Owners Grant = $15,000
Minimum deposit required = $18,980
First Home Buyers looking to buy land and build may be able to shave their minimum deposit down even further, by way of HomeStart’s 2% construction loan product when building with their partner builders.
From June 6 2024
House & Land Price = $760,000 ($380,000 land + $380,000 build)
Stamp duty payable = $0
First Home Owners Grant = $15,000
Minimum deposit required = $7,733
HomeStart have a number of ways they can assist home buyers with low deposits, not just first home buyers looking at new property.
There are many factors to consider when buying or building your first home and this article can’t cover all of the finer details, as there are a lot of eligibility conditions attached. There is also capacity to utilise a family guarantee with some lenders. There’s a lot of information to cover, so the easiest thing to do is to simply speak about your circumstances and property goals with one of our Mortgage Brokers. Our team can establish what assistance may be available to you and how we can get it done for you.
*The information provided in this article is general in nature and does not take into account your personal circumstances. Since everyone’s personal situation is different, this article should not be taken as advice.
