The latest South Australian government budget introduces a number of measures designed to help local property investors and first-home-buyers of off-the-plan properties, as well as speed up the construction of new developments.
“There’s plenty of good news in the latest state budget for local property investors and first-home-buyers,” said Ironfish Adelaide Managing Director, Damon Nagel.
“It’s also great to see that the government is gearing up for major investment in Adelaide infrastructure which will positively impact amenity and lifestyle for local residents,” he said.
Foreign investor surcharge
South Australia has joined other Australian states in imposing a tax on foreign buyers of residential property. The tax is designed to help prevent locals from being priced out of the market, the Treasurer says.
A conveyance duty surcharge of 4 per cent will apply to residential property purchased by foreign buyers and temporary residents from 1 January 2018.
The new tax is similar to levies imposed in other states, with New South Wales charging 8 per cent, Victoria 7 per cent, Western Australia 4 per cent and Queensland 3 per cent.
“If we don’t charge the surcharge but they’re charging it in every other jurisdiction but here what you’ll see is that foreign investment flood into our residential properties,” Mr Koutsantonis said to the ABC.
“I don’t want my daughters to move further and further away from me where we’ve raised our family because they can’t afford it because of foreign investment pricing them out of the market,” he said.
Off-the-plan property incentives
A new pre-construction grant of $10,000 has been introduced for buyers of off-the-plan apartments in buildings yet to be built. Any buyer of an off-the-plan apartment contract who signs before September 30 will be eligible for the $10,000 pre-construction grant. The measure is designed to encourage prospective buyers which will then help to speed up development construction.
Stamp duty concessions of up to $15,500 for off-the-plan apartments which were due to expire at the end of this financial year will also be extended for a further 12 months.
In addition to these off-the-plan incentives, there is also a First Home Owner Grant of $15,000 for new residential property.
If first-home buyers take advantage of this grant along with the $10,000 pre-construction grant, and stamp duty concessions – there are potential savings of over $40,000.
$9.5 billion infrastructure push: Adelaide focus
The foreign investor surcharge is projected to raise $48.8 million over four years, which alongside a major new bank levy, will help to fund a $9.5 billion infrastructure spend over the next four years. A record $2.2 billion will be spent in the coming year alone.
Key infrastructure projects include a $1.1 billion investment in health including a new Adelaide Women’s Hospital connected to the new Royal Adelaide Hospital.
Two new schools will be built, under a public-private partnership, to meet demand arising from strong population growth in the north and south of Adelaide.
The budget also commits to a number of major roads projects including the South Road upgrade and duplication of Main South Road from Seaford to Sellicks Beach.
“This is a fair and equitable budget that is focussed on what is important to the people of South Australia, Treasurer Koutsantonis said.