A new report released by the Housing Industry Association (HIA) claims Sydney-siders are forking out $576,000—around half the cost of their purchase—in taxes and fees when buying new house and land packages.
In Melbourne, those fees add up to $373,000, while Brisbane house and land packages will set buyers back $348,000.
Hobart residents can expect charges of $257,000, while Perth and Adelaide purchasers are paying $237,000.
The findings come from the Centre for International Economics report contracted by the HIA.
The report shows taxes and charges on homes in Sydney have risen by 38 percent since 2019, while Brisbane has faced a 106 percent increase in fees and taxes.
Tax and regulatory fees on new apartments in Brisbane are up by $104,000 from 2019 figures.
The HIA says the findings reveal a system that is hindering efforts to house the nation, which has already been deemed at a crisis point.
Further complicating existing shortages is the revelation that it can take more than a year to obtain development approval for sub-division, with up to seven months of that time attributed to “unnecessary delays.”
“Australia has an acute shortage of housing because governments continue to tax new home building and impede productivity in the sector,” HIA Chief Economist Tim Reardon said in a statement.
“In Sydney, governments are adding in excess of half a million dollars to the cost of a new home, that new home buyers are then required to repay for decades as part of their mortgage.
“With half of the cost of a new home being taxes and government charges, new home buyers are spending 15 years of a 30-year mortgage just paying off that tax.”
Compounding the issue further, the taxes and fees also accrue interest over time, meaning the extra charges gradually cost a buyer more than the actual home.
“In Brisbane and Adelaide, government taxes, fees and charges on new homes have doubled in five years. Not even the best, legitimate investment strategies could achieve that same level of return,” Reardon said.
“The primary solution to resolve Australia’s housing shortages is to remove government taxes and red tape to allow the industry to deliver the homes Australians are demanding.
“Delays on getting approvals take much longer than the time it takes to actually build a home.”
Reardon believes the high taxes on housing are the result of a government under fiscal pressure, seeking to find a lucrative revenue stream.
“What they do not realise is that when they increase taxes on housing, there ends up being fewer of them,” he said.
“It is incongruous that governments set home building targets, while at the same time tax new home building even more. The more government tax new homes, the fewer homes will be built.
“Taxes on housing have not resulted in more of them being built. Higher taxes on new housing will only lead to fewer new homes and higher prices for existing homes.”
Additional findings from the report show that introducing measures like $500 million in construction industry payroll tax cuts could boost the sector, in turn creating better pricing and greater supply.
In a statement online, real estate chain First National said there was a need for a “serious review” of housing taxation policies.
“As the cost of living continues to rise, tackling excessive housing taxes and regulatory barriers is essential to ensuring more Australians can afford to own their own homes,” the statement said.
“The challenge now lies in whether policymakers will take action to relieve this burden—or continue making homeownership an increasingly unattainable dream.”
Housing Minister Clare O'Neil, and the New South Wales and Queensland state governments were contacted for their perspectives.
