In an effort to attract more people to reside in the centre of Adelaide, the South Australian State Government formally announced yesterday when handing down the 2012-2013 State Budget that it was abolishing stamp duty on apartments in multi-level residential projects valued up to $500,000.

The apartments must be purchased off-the-plan and be located in the Adelaide City Council area. The concession does not apply to townhouses.

The concession period applies to those sale contracts entered into on or after 31 May 2012 until 30 June 2014 (inclusive) resulting in a maximum concession for purchasers of up to $21,330.

If an apartment is purchased with a market value higher than $500,000, the buyer will still be entitled to a stamp duty concession. For example, a $700,000 apartment attracts a duty of $32,330 but with the maximum concession applied of $21,330, stamp duty of $11,000 would be payable.

The Government also announced that from 1 July 2014 until 30 June 2016 (both dates inclusive) partial stamp duty concessions would apply for off-the-plan apartments valued up to $500,000 resulting in a maximum concession for purchasers of up to $15,500.

During this period stamp duty on apartments valued up to $500,000 will be determined on the notional land value of the apartment and the value of any construction already performed at the time the sale contract is entered into rather than on the full market value of the apartment.

For those buyers of off-the-plan apartments valued above $500,000 during this period, a stamp duty concession capped at $15,500 will also be available. The duty payable will be reduced by an amount to be assessed according to the stage at which the construction or refurbishment of the multi-level apartment building in which the relevant apartment is, or will be located has achieved at the date of the sale contract. For example, a $600,000 apartment which is purchased prior to any work in relation to the relevant apartment building commencing will attract the maximum concession of $15,500.

In addition, the Government announced that it was extending the First Home Bonus Grant (FHBG) until 30 June 2013. The FHBG only applies to properties valued up to $400,000. It means that a purchaser of an off-the-plan city apartment valued at $400,000 would save $31,300 on their purchase:

  • First Home Owners Grant $7,000;
  • SA Government FHBG $8,000 (for properties valued at $400,000 or less);
  • Stamp Duty Concession $16,330 (for an off-the-plan apartment valued at $400,000);
  • Costs Saving $31,330

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.