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South Australia’s Liberal Party has placed housing policy at the centre of its 2026 election campaign, pledging to abolish stamp duty by 2041 if it returns to power — a move that would make the state the first in Australia to remove the property tax entirely.
Opposition Leader Vincent Tarzia said the long-term plan would begin with relief for first-home buyers before a gradual phase-out over 15 years. The Liberals argue that the tax — currently generating about $1.6 billion annually — discourages mobility in the housing market and locks people out of home ownership.
“Stamp duty is an inefficient tax that inhibits the housing sector’s ability to reorganise itself and stops young people getting into the housing market and older people from downsizing,” Mr Tarzia told The Advertiser.
Under the proposal, a Liberal government would adjust the stamp duty brackets within five years of taking office and aim to eliminate the tax entirely by 2041. The first stage would build on an existing commitment to exempt first-home buyers purchasing established properties worth up to $1 million.
Mr Tarzia told radio station FIVEaa that while the reform would be ambitious, it would ultimately boost economic activity and give South Australia “a competitive advantage” over other states.
Stamp duty and payroll tax are South Australia’s two largest sources of state-based revenue. Removing one of them would cost the budget an estimated $1.6 billion a year, according to the opposition’s own figures, although Premier Peter Malinauskas cited a higher potential loss of $2.3 billion in his response.
Mr Malinauskas described the plan as “one of the most reckless, dangerous policy announcements” he had ever seen, arguing that such a revenue hole would jeopardise funding for essential services. He compared the policy to former UK prime minister Liz Truss’s unfunded tax-cut program in 2022, saying it was “a complete fallacy” to assume growth alone could fill the gap.
The Premier also warned that expanding the stamp duty exemption to existing dwellings could have unintended consequences for affordability. “Under the Liberal’s policy, first-home buyers will now be competing with every single other person who already owns a home in the market,” he said.
Mr Tarzia has ruled out introducing new taxes to replace the lost income, insisting that “good financial management” and economic expansion would offset the decline in revenue. He said a Liberal administration would protect frontline services and manage the transition through “growing the pie” rather than cutting expenditure.
For mortgage and property professionals, the proposal represents a significant shift in how transactions could be financed and assessed over the next decade. Removing stamp duty — a major upfront cost in property purchases — would lower the initial cash barrier for borrowers and could encourage greater turnover in the market, particularly among downsizers and first-time buyers.
However, lenders and insurers note that any surge in demand without matching supply could add further pressure to prices. With South Australia already experiencing tight stock levels and steady population growth, analysts say the real-world effect on affordability will depend heavily on new housing construction and planning reforms.
Property groups have long criticised stamp duty as inefficient and distortionary, yet most attempts at reform have stumbled on the fiscal risk it poses to state budgets. The proposal would make South Australia a testing ground for how far structural tax reform can stretch in an era of high public debt and rising infrastructure demands.
While business and real estate leaders have cautiously welcomed the discussion, many remain sceptical of the timeline. Several economists say phasing out a tax of that size would require either substantial productivity gains or alternative revenue sources over the 15-year transition.
The Liberal Party has said it will release full costings closer to the March 2026 election. Until then, the debate is expected to sharpen around whether eliminating stamp duty will genuinely improve housing access or simply shift the affordability problem elsewhere.
Whether the proposal ever reaches the statute books will depend on an election outcome that, for now, appears uncertain. The next South Australian poll is set for 21 March 2026, and most recent indicators suggest the Liberal Party faces an uphill battle to reclaim government. Labor currently holds a commanding majority under Premier Peter Malinauskas, whose personal approval ratings remain strong and whose government has benefited from solid economic management and visible infrastructure spending.
Political analysts estimate the Liberals would need a swing of roughly five percentage points to regain power. After heavy losses in 2022 and subsequent by-elections, the party must win back several marginal metropolitan seats, particularly in Adelaide’s eastern suburbs, to have any realistic path to government. While Vincent Tarzia has sought to energise the party with a reform-driven agenda, including housing and tax changes, the party’s internal divisions and recent leadership changes may make a rapid turnaround difficult.
If the Liberals were to win, implementing a 15-year abolition plan for stamp duty would still require legislative certainty across multiple terms of government. The timeline, stretching to 2041, would likely outlast several administrations, making bipartisan support or legislated triggers essential for the reform to survive changes of power. Treasury officials would also need to reconcile the projected revenue losses with long-term spending commitments, an exercise that could reshape South Australia’s fiscal framework.
For lenders, brokers and housing market participants, the prospect of such a policy being realised hinges as much on political endurance as on economic viability. Even if the Liberals fall short next March, their proposal is likely to influence the broader national conversation about state tax reform and housing affordability. It ensures that, in an election dominated by cost-of-living pressures, the question of whether stamp duty has a future in Australia will remain firmly on the agenda.
