Taxes on new homes in Sydney have hit $250,000 per dwelling, adding $1,200 a month to the average mortgage, according to new research.

The findings by consulting rm ACIL Allen indicate that government taxes and charges as a proportion of a total house cost are highest in Sydney, where they contribute 25%, followed by Melbourne and Darwin where they make up 24%.

“The figures show government taxes are the second biggest contributor to the cost of Australian homes behind actually constructing them in the first place,” says Mike Zorbas, advocacy chief for the Property Council of Australia which commissioned the research.

ACIL Allen says infrastructure charges are often imposed on the housing industry to raise tax revenue and the consequences are reduced housing supply and higher prices.

“More affordable housing and a better deal for Australian home buyers starts with a critical review of the efficiency and fairness of government taxes and charges on property, especially at a state and local level,” Zorbas says.