Up to half the cost of a new home and land package is now made up of government taxes, fees and charges.

Research by the Centre for International Economics says in Sydney that is equivalent to $576,000 on a new house and land package. The value of taxes and charges on new builds in Sydney has increased by 38% in the past five years, while in Brisbane, it is even higher – up by 106%.

HIA Chief Economist Tim Reardon says Australia has an acute shortage of housing, and much of the issue is caused by governments continuing to tax new home buildings, which impedes productivity “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,” he says.

The analysis shows that 49% of the cost of a new house and land in Sydney is made up of taxes, 43% in Melbourne, 41% in Brisbane, 37% in Adelaide and Hobart and 36% in Perth. “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,” Reardon says.