Housing taxes have doubled in five years, driving up costs

Government taxes and regulatory costs have doubled in some cities over the past five years, significantly increasing the price of new homes, according to the Housing Industry Association’s (HIA) latest report.

Commissioned by the Centre for International Economics (CIE), the Taxation of the Housing Sector Report highlighted the financial burden placed on home buyers due to excessive taxation, fees, and regulatory delays.

• In Sydney, $576,000 – half the cost of a new house and land package – comes from taxes and charges.
• In Brisbane, taxes on new homes have more than doubled (+106%) since 2019, rising by $179,000.
• The cost of taxes and fees for a new apartment in Sydney now stands at $346,000.
• Development approvals take over a year, with seven months attributed to unnecessary delays.

Sydney home buyers paying decades of taxes

HIA chief economist Tim Reardon (pictured) criticised the impact of housing taxes on affordability, arguing that government-imposed costs are a leading factor in Australia’s housing shortage.

Rising construction costs further exacerbate the issue. As of 2025, building a new home in Sydney costs between $2,500 and $7,600 per square metre depending on the quality of materials and finishes.

“In Sydney, governments are adding in excess of half a million dollars to the cost of a new home, which buyers must repay over decades,” Reardon said. “With half the cost of a new home being taxes and charges, buyers are spending 15 years of a 30-year mortgage just paying off taxes – plus interest.”

Brisbane and Adelaide see largest tax increases

The HIA report showed Brisbane and Adelaide have experienced the steepest increases in housing taxes and charges.

• In Brisbane, the tax component of a new apartment has surged by $104,000 (+68%) since 2019.
• In both Brisbane and Adelaide, government-imposed costs on new homes have doubled in just five years.

Reardon said that even the best investment strategies couldn’t match these rapid increases in government revenue from housing taxes.

“It is incongruous that governments set homebuilding targets while simultaneously increasing taxes on new homes,” he said.

Regulatory delays further restrict housing supply

The report also identified lengthy approval processes as a key barrier to increasing housing supply.

• Subdivision approvals take over a year, while actual construction takes far less time.
• Bureaucratic delays add up to seven months to project timelines, slowing the delivery of new homes.

“Governments keep taxing new homebuilding and impeding productivity in the sector, worsening the housing shortage,” Reardon said.

In January, only 16,579 homes were approved for construction, which is significantly below the government’s target of 20,000 homes per month. Over the past year, this shortfall amounted to around 65,000 homes, or 27% below the annual target of 240,000 homes.

Tax burden drives prices higher, supply lower

The HIA report warned that higher taxes on new homes reduce supply, driving up prices for both new and existing homes.

“If governments were serious about solving affordability, they would reassess the tax burden on new housing,” Reardon said.

Calls for policy reform

With taxes and charges accounting for up to half the price of a new home, HIA is calling for urgent reforms to reduce government-imposed costs and streamline approval processes to help meet Australia’s housing targets.

As housing affordability worsens, industry experts stress that removing excessive taxes and red tape is essential to increasing supply and addressing demand.

Read the HIA announcement and access the full report.