An authoritative report commissioned by the Housing Industry Association (HIA) and conducted by the Centre for International Economics (CIE) confirms that government taxes, fees, and regulatory costs account for up to 49% to 50% of the total price of a new greenfield house-and-land package in Sydney. [1, 2]
For a median-priced new house-and-land package in Sydney costing around $1.18 million, roughly $576,000 goes straight to all levels of government. This means only about half the budget is actually spent on physical building materials, labor, land, and the builder’s profit margin. [1, 2]
Where is the money actually going?
The “50% government cost” is not a single tax. Instead, it is a cascading pile of federal, state, and local charges accumulated over the 10-year process of turning raw land into a finished home: [1, 2]
- Statutory Taxes: Goods and Services Tax (GST) on construction components, state stamp duty, and land tax during development. [1, 2]
- Infrastructure Contributions: Developer levies and local council charges (like Section 7.11/7.12 contributions) to fund major things like local roads, drainage, utilities, parks, and schools. [1, 2]
- Regulatory & Red Tape Costs: Expenses driven by lengthy zoning delays, council Development Application (DA) approvals, and compliance with building regulations. The study noted that navigating red tape adds months of holding costs before a single brick is laid. [1, 2, 3, 4, 5]
How Sydney Compares
Sydney is the most heavily taxed market for new builds in Australia, though other major capital cities follow closely behind: [1, 2]
| City | Government Share of a New House-and-Land Package |
|---|---|
| Sydney | 49% – 50% |
| Melbourne | 43% |
| Brisbane | 41% |
| Adelaide | 37% |
| Perth | 36% |
(Note: If you are building a new apartment or infill unit rather than a greenfield house-and-land package, the government’s take is slightly lower but still significant, sitting at roughly 38% in Sydney). [1]