Government Taxes, Fees, and Charges Now Make Up Half the Cost of New Homes in Australia.

A new report from the Centre for International Economics reveals that government taxes, fees, and charges now account for up to half the cost of a new home and land package in Australia.

In Sydney, this equates to a staggering $576,000 on a typical new build.

Over the past five years, the cost of taxes and charges on new properties has risen sharply, with Sydney seeing an increase of 38%. Brisbane has experienced an even greater surge, with these costs skyrocketing by 106%.

HIA Chief Economist Tim Reardon highlights that Australia is facing a severe housing shortage, and much of this problem stems from the government’s heavy taxation of new home builds. These taxes significantly reduce the industry’s productivity.

“With taxes now making up half the cost of a new home, buyers are spending nearly 15 years of a 30-year mortgage just covering these government charges,” Reardon says.

The research reveals the varying impact of these costs across Australian cities: 49% of the cost of a new home in Sydney is made up of taxes, 43% in Melbourne, 41% in Brisbane, 37% in Adelaide and Hobart, and 36% in Perth.

Reardon argues that the key to addressing Australia’s housing crisis is to reduce government taxes and red tape.

By doing so, the industry could more efficiently meet the demand for new homes, benefiting both buyers and investors.