Downsizers are set to pocket a healthy stamp duty discount at South Australia’s upcoming state election, with the major parties offering tax discounts to older homeowners in a bid to free up larger houses for families.
The South Australian Labor government and the Liberal opposition party have both promised stamp duty discounts specifically for downsizers at the March 21 state election.
However, their plans have key differences around the size of the discount, who exactly gets it, and more.
Offering stamp duty concessions to older homeowners is a new approach since discounts are normally offered to first-home buyers to help them into the property market sooner.
Premier Peter Malinauskas announced a plan to abolish stamp duty for downsizers buying new homes on Sunday, while state opposition leader Ashton Hurn promised a one-off $15,000 stamp duty concession earlier this month.
Under the state government’s plan, stamp duty would be abolished for people aged 60 or over who were buying a smaller, newly-built home or off-the-plan apartment worth up to $2 million.
South Australian stamp duty discount election plans
| Labor | Liberal | |
| Discount value | Up to $103,830 | $15,000 |
| Age eligibility | 60+ years | 55+ years |
| New property value cap | $2 million | $1.2 million |
| New property conditions | Must be a newly built or off-the-plan home to live in. Must be smaller than previous home. | Can be a new or existing property. Must be worth less than the current property. |
| Current property conditions | N/A | Must have lived in the home for 5+ years. |
People purchasing a $1 million home who have sold their larger home would receive a full stamp duty concession worth $48,830, according to government estimates.
It would increase to $76,330 for a $1.5 million home, while a maximum concession of $103,830 would apply for a $2 million home.
Alternatively, the state opposition plan would offer people aged 55 and over a $15,000 one-off stamp duty concession on the purchase of a home of lesser value, with a $1.2 million cap on the new property.
Downsizers are set to receive a stamp duty discount at the upcoming South Australian state election. Picture: Getty
Eligible people must have lived in the existing home for at least five years, and the transaction would need to happen within a 12-month period.
Ms Hurn said the incentive was designed to create much needed movement in the housing market, unlocking thousands of homes for younger families.
"South Australians who want to purchase a smaller home face paying upwards of $50,000 in stamp duty, money that should be available for them to enjoy their lives in their later years,” she said.
Adelaide home prices have jumped more than 13% during the year to January. Picture: Getty
“This incentive will keep more money in their pockets, make buying a smaller home more affordable and, ultimately, opens doors for more young families looking to put down roots in a larger home.”
Mr Malinauskas said his government's housing plan was all about building more homes.
“Our plan to abolish stamp duty for downsizers is specifically calibrated to increase housing supply, while also freeing up larger homes for families,” he said.
South Australia premier Peter Malinauskas has promised to slash stamp duty for downsizers buying new homes. Picture: Sarah Reed/Getty
“By abolishing stamp duty, we are offering a real incentive to older South Australians to downsize.”
Both parties are also offering stamp duty discounts for first-home buyers.
South Australian opposition leader Ashton Hurn has pledged a $15,000 stamp duty discount on new and existing homes for downsizers. Picture: Supplied
Stamp duty is a significant cost for Australians looking to buy and move home, but it’s also a major revenue source for state and territory governments.
Angus Moore, executive manager of economics at REA Group and co-author of the Growing Burden of Stamp Duty – PropTrack Report, said stamp duty was very costly for home buyers.
“Stamp duty is an inefficient tax because it discourages people from moving to homes that suit them,” he said.
Mr Moore said stamp duty reform was critically needed to allow the property market to operate more efficiently.
State and territory governments offer a variety of stamp duty concessions to home buyers, with the majority aimed at first-home buyers.
However, some states like Victoria have opened up stamp duty concessions to everyone who purchase a new home and off-the-plan property in order to stimulate new home building.
Home prices in South Australia have surged in recent years and has been one of the strongest property markets in the country during the past five years.
Adelaide’s median house price increased 13.6% to $996,000 during the year to January, while unit prices were up 14.6% to $686,000, according to the latest PropTrack Home Price Index.
During the same period, the median house price in regional SA rose 12.5% to $501,000, with unit prices increasing 13.1% to $460,000.
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