Passivhaus Costs

People love the idea of Passivhaus, however, they are often ‘freaked out’ when they start reading outdated and misinformed articles about cost premiums.

This article sets out to provide an informative understanding of costs associated with Passivhaus. If you are looking to build a project home, which has have a low square meter rate, the premium to go Passivhaus will be high. However, with a higher budget the premium to go Passivhaus can be kept to a minimum, be cost-neutral, or result in a saving.  

Is there a premium to go Passivhaus?

This section explores examples where Passivhaus can be cost neutral, achieve savings, or requires a premium:

European Cost Premium

In Germany, where the Passivhaus standard originated from, it is estimated that the extra construction costs to build to Passivhaus is typically somewhere between 3–8% when compared with a standard build. Whilst, in the UK the increase is around 5%.

Cost Neutral

However, it is well documented that experienced Passivhaus designers have managed to build Passivhaus buildings at no extra cost both in Germany, Austria, and the UK.

Local Data

Passivhaus is an emerging market in Australia and currently there is little data assessing the relative costs difference between Passivhaus and standard construction. And the data that is available there is a large variation between builds, this is due to multiple reasons including the local climate to each of the builds.

Sydney Cost Neutral

It is commonly known that in Sydney, a humid subtropical climate, homes are being built to the Passivhaus standard which is cost neutral when compared to a standard build which meets the minimum building code requirements. This is explored further in an article here.

Victoria Passivhaus Premium

In Victoria, where the weather is colder than Sydney, there is typically a premium to take a project to Passivhaus. However, with smart design this premium minimum or neutral, or it could save you money. 

Victoria Cost Savings

There are examples of two Victorian homes that were fully designed, documented, and costed by a builder, then it was decided to take them to the Passivhaus standard. The build cost resulted in a 7% and 15% saving without any visible changes to the overall design. This was due to numerous factors. 

It should be noted that they were both large homes, with one being 240sqm and the other 360sqm, which is larger than the average Australian home of 186.3sqm; whilst the square meter rates were higher than your standard project home build. Thus, a smaller home with a lower budget would not necessarily achieve similar saving. You can read more about these two projects here.

Low Budgets

If you are starting off with a low budget there it is likely there will be a premium to go Passivhaus. In Victoria, the entry level for a super basic Passivhaus customised homes is generally considered to start at $2,500 per square meter (2020 rates), this includes a granny flat that is being sold for $2,551 per square meter, plus site costs (2020 rates). This is higher than your standard project home build, and lower than a custom build home.

General Rules for Building in Victoria

If you are building a Passivhaus in Victoria here are some key rules:

  • For entry- level budgets the premium will be high.
  • For higher budget projects the premium will be lower, or in some cases provide a saving.
  • Cooler regions will have a higher premium, due to the increased insulation and higher glazing specification.
  • The higher the altitude the cost premiums will increase.

Cost Premium & Smart Design

It is generally considered that the premium to go Passivhaus in Australian can be as low as 0-3%, however, there are a multitude of factors which affect any build costs. This can range from the design, site conditions, construction type, materials, amount of glazing, solar gain, site access, market conditions, etc.

Smart Design & Cost Reduction Strategies

With smart design the premium to build Passivhaus can be minimised minimalised or be cost neutral, or in some cases there can be an overall cost saving (as illustrated above), with some examples including:

  • Having a site with a good northern orientation, with no overshadowed by adjoining building, trees (unless deciduous), mountains, etc.
  • A favourable ‘Form factor’, which you can learn more about here.
  • Minimisation of thermal mass (concrete, which is typically more expensive and is not required in a Passivhaus, unlike a passive solar design).
  • Keeping glazed areas to a practical minimum? minimal. For example, have smaller windows to bedroom, bathrooms, etc., whilst being more be more generous to the living areas.
  • Selecting and designing windows wisely.
  • Using prefabricated panels to reduce reduced construction time, which may reduce the builder’s preliminaries.
  • Analysing the brief to reduce the overall building area, for example replacing walk-in-robes with a robe, having a study nook as opposed to a study, having a second living area double up as a guest room with either a fold-out bed or murphy bed.

Other Factors Affecting Costs

As with any build the following factors can affect the build costs, which also need consideration:

  • Site location
  • Site access
  • Soil classification
  • Slope of land and terrain
  • Demolition
  • Parking
  • Project’s size
  • Construction type
  • Selection of materials and finishes
  • Market conditions
  • Bushfire Attack Level (BAL), if applicable
  • Septic system, if required

Passivhaus Software & Cost Savings

The Passive House Planning Package (PHPP) is an amazing tool as it is proven to be accurate in practice, as opposed to the Nationwide House Energy Rating Scheme (NatHERS), where there is a performance gap between what is designed and what is built.

One benefit of PHPP is that you can save money by avoiding the over- specification of building components due to the build outcome being accurate. For example, the sizing of a split system air conditioner, if required, is based on accurate calculations as opposed to being over specified.

Life Cycle Costs

When building a Passivhaus the overall life cycle costs should also be considered consider, with studies illustrating a lower whole-life cost than a traditional new build. This is due to heating and cooling bills typically being reduced by 90%, and with higher build quality resulting in lower maintenance. This is also being recognised by some banks who are reducing their interest for low energy homes.

Retrofit and Passivhaus Premium

The premium for a Passivhaus retrofit depends on the existing construction method, and how easy it is to bring the project up to the Passivhaus standard. This needs to be worked out on a case-by-case basis.

Managing Costs

When considering a Passivhaus new build it is important that you understand the overall project costs, including the costs of the works, along with other associated costs including the architect/designer and consultants’ fees, along with other associated costs (landscaping, loose furniture, bank fees, relocation costs, etc.).

It is also critical that your budget is adequate for your brief, and if necessary, adjust your budget or your brief, or both. As the design develops it is important that you obtain a budget estimate, and this is updated as the design and documentation develops.


As with all projects it is important to understand the likely costs before proceeding with the project’s design and documentation stage. It is even more critical to understand how the associated costs of Passivhaus will affect this, whether it will be a premium, cost neutral, or a saving.