Australian Property Updates

Property Information & Real Estate Updates

Carbon tax will add to costs of construction

The introduction of Carbon Tax is expected to add $5,000 to the average cost of building a home due to the tax impact on building materials.

According to the Australian, energy efficient homes will be costing more as the Carbon tax will also affect the price of double-glazing as well as insulation materials.

The Master Builders Association expects at least $5000 to be added to the cost of building the average residential home, currently about $300,000.

“There’s so many products that go into making a house, it’s logical that a tax of this nature is going to have an impact on the sector,” said MBA chief economist Peter Jones.

Projections by the Master Builders Association indicate that the cost of metals — from aluminium windows to structural steel to Colorbond roofs — will go up by between 2 and 4 per cent.

Mineral-based products such as concrete and bricks will experience a price rise of 3 per cent on average, and timber will rise by 1.5 per cent.

“Insulation prices are also expected to go up,” Mr Jones said.

The inflationary impact on the carbon tax on overall prices may result in the RBA increasing the current cash rate sooner rather than later – further slugging home owners through higher costs of home loans.