New research has confirmed one of the greatest scandals in Australian real estate – the reality that taxes and charges from the three levels of governments comprise between 40% and 50% of the cost of creating new homes.

At a time when Australia is experiencing its greatest ever housing crisis - marked by shortages of homes, poor affordability, escalating rents and increasingly high construction costs - it’s outrageous that anyone building a new house on a small block of land will be paying a huge percentage of the cost to government.

Taxes, fees and charges make up almost 50% of the cost of a house-and-land package in Sydney. In Brisbane and Melbourne, it’s between 40% and 45%.

Recently published data from the ABS and the HIA show that the median price for a residential home site in our capital cities is now over $400,000 – but over $700,000 in Sydney.

The average cost of building a basic house on that very small but expensive block of land is around $540,000, according to the official figures.

Add those figures together. It means that the typical cost of a new house and land package in our cities is now around $950,000. It’s getting scarily close to a million dollars.

In Sydney it’s already well over a million dollars.

And if you’re building that new house-and-land package in Sydney it’s costing around $1.2 million and up to half of that is taxes, fees and charges from government.

If you’re building a new home in Melbourne or Brisbane, you’re spending well over $900,000 and over $400,000 is going into government coffers.

Think about that. If you eliminated the government impost component of a new house and land package, it would cost around $600,000 in our biggest city. Imagine being able to buy a brand new house in Sydney for $600,000. 

In Brisbane it could be less than $500,000. 

Remember those figures, next time you see politicians standing in front of television cameras claiming they care about the affordability problems and want to fix the housing crisis.

Politicians have caused this crisis in myriad different ways and this is one of the biggest of all: they milk the housing industry for revenue and in doing so, they massively inflate the cost of creating new homes in this country.

All three levels of government use housing as a cash cow and they’re adding massively to the cost of new homes – to the point that young buyers can no longer afford to build their dream home.