SA axes stamp duty for downsizers in major housing shake-up

South Australia’s re-elected state Labor government has made good on its promise to ease the cost burden on older people looking to “downsize” or “right-size” their homes.

Residents of the state who are aged 60 and over will no longer have to pay stamp duty when purchasing a newly-built home or off-the plan apartment, provided it is smaller in area than their existing home and the purchase price is less than $2 million.

The initiative removes one of the main cost barriers for older South Australians looking to move into smaller, more manageable homes as they age, and has been warmly welcomed by property

developers, who’ve flagged it as an important tool to drive more investment in new housing.

It also means South Australia now has the most generous on-going downsizer provisions of any Australian state or territory.

The details

Premier Peter Malinauskas made abolishing stamp duty for downsizers one of his key election priorities and on the day his new cabinet was sworn in after a resounding state election win, he signed the instrument bringing the tax change into effect.

“We are getting on with the job,” he said.

“We said this tax abolition would come into effect on the day the new Malinauskas Government is sworn in, and today we honour that commitment.”

Image from ABC News/Daniel Taylor

South Australians aged 60 and over who are downsizing or “right-sizing” to a newly-built home or off-the-plan apartment valued at less than $2 million at the time of sale will no longer have to pay stamp duty on the transaction for contracts signed on or after the 25th of March 2026.

The state government estimates the move will save eligible downsizers up to $103,830 in state stamp duty costs and transaction fees.

“Removing stamp duty for downsizing to a new home achieves clear objectives: it saves tens of thousands of dollars for people choosing to move to a new, smaller home, delivers more existing homes for growing South Australian families, and most importantly it adds to our overall housing stock by incentivising new construction,” Mr Malinauskas said.

“For many older South Australians, stamp duty has been one of the biggest barriers to downsizing,” said Adelaide developer Daniel Palumbo, the Managing Director of the Palumbo Group.

“Removing that cost is clearly encouraging people to seriously consider making the move.”

Mr Palumbo’s company currently has several large projects planned in suburban Adelaide and said the new policy was already having an impact on potential sales.

“We’re already seeing strong early signs that this policy is having a real impact on buyer behaviour from downsizers who recognise this is a rare opportunity to make their move while saving significantly on stamp duty,” he said.

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“At both our Royal Apartments project in Kent Town and Hillsview Green project in Angle Vale, our sales teams have been fielding a noticeable increase in enquiries from downsizers specifically asking about stamp duty relief.

“What we’re seeing on the ground is exactly what this policy is designed to achieve, unlocking movement in the housing market and helping free up larger homes for families,” Mr Palumbo said.

“If this momentum continues, it has the potential to be a meaningful driver of both housing turnover and new development activity across the state.”

The downsizer initiative for seniors is one of a suite of housing measures the Malinauskas Government took to the recent state election.

Other plans include two $500 million funds - one for purchasing strategic land that can be used for housing development, while the other will see the state government help developers unlock more city housing, by acting as guarantor for funding for eligible apartment developments.

Other states

The Malinauskis government’s move means South Australia now has the most generous downsizer initiatives aimed solely at older citizens of any state or territory.

In neighboring Victoria, eligible pensioners are allowed a one-off stamp duty exemption to move to a smaller home, as long as the new property is valued at $750,000 or less.

However, a temporary off-the-plan concession for all buyers (including downsizers) on the construction costs (not the land value content) of new apartments and townhouses is in place until the 20th of October 2026.

Image from SkyNews Australia

Western Australia recently expanded stamp duty holidays for new builds worth up to $800,000, with concessions tapering out at $900,000.

In Tasmania, eligible pensioners stand to receive a 50% concession when downsizing to a home with a value up to $600,000, while the ACT, which is in the process of moving from stamp duties to an ongoing land-tax regime, offers a pensioner duty concession scheme for eligible residents.

Currently no specific statewide downsizer-only concessions are in place in Queensland, New South Wales or the Northern Territory, with state government relief primarily focused on first home buyers.

However, residents over 55 of all states can take advantage of the Federal government’s Downsizer Superannuation Contributions provision.

Eligible individuals can contribute up to $300,000 ($600,000 for couples) from the proceeds of selling a home they have owned for at least ten years into their superannuation.

Why downsize?

A survey of 3000 Australians undertaken 2 years ago showed that housing costs have caused one quarter of Australians under 40 to delay changing jobs and caused more than one in five 30-40 year olds to delay having children.

The McKinnon poll also found people of all ages are being prevented from moving (whether that might be to more appropriate sized housing or to be closer to schools, family or a workplace) by housing costs.

Citing the poll in a report on the real life effects of taxes like stamp duty, REA Group’s PropTrack and the e61 Institute declared that “housing costs comprise more than just stamp duty, but five months of take-home income (the average up-front stamp duty amount paid in Australia) is a sizeable cost.”

The research also found that in Australian cities, high stamp duty was deterring close to a quarter of people (usually older “empty-nesters”) from downsizing.

“In a housing shortage, downsizing benefits everybody,” the report stated.

“The downsizers benefit from a better suited home.

“Everyone else benefits from the previously underused housing becoming available.”