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The Queensland government will scrap laws aimed at making new houses more sustainable, saying the move will boost home affordability.
Laws requiring all new homes to have rainwater tanks and gas, solar or heat pump hot water systems will be dumped next year.
Housing Minister Tim Mander says the cost of building a new home could be reduced by more than $5000.
However, councils can retain mandatory rainwater tank requirements if they can show there's a net benefit to the community.
"These requirements add an unnecessary cost to homeowners and place an unwanted drag on the construction industry," Mr Mander said in a statement on Friday.
The move has the support of the Housing Industry Association and Master Builders.
"These are very pragmatic decisions that will make a meaningful contribution to improving housing affordability, especially for first time buyers," HIA executive director Warwick Temby said.
But the Rainwater Harvesting Association of Australia said Queenslanders would face increased water restrictions and higher water costs.
The changes would also put 500 water tank industry jobs at risk, spokeswoman Jackie Hammond said.
Ms Hammond said the government had bowed to pressure from the building industry.
"A tank costs relatively little to install in a new home and that amount is returned to the owner and the community ten-fold with reduced water costs," she said.
"The government has bowed to pressure from the building industry, blindly believing that not having a rainwater tank will stimulate the residential sector when what it will really mean is that builders get to make more profit."
She said the tank requirement had resulted in water savings of 90,000 litres per home, per year, translating to annual household savings of more than $167.
The Queensland Conservation Council said the government's move was short-sighted and would cost more in the long run.
Executive Director Toby Hutcheon said more Queenslanders would be relying on a centralised water supply.
He said that would mean more expenditure to build and maintain dams, and to provide that water to homes.
"It is all massively expensive for the taxpayer," Mr Hutcheon told AAP.
"The more people that can capture water where they live, it ends up being cheaper for everybody."
The Queensland opposition called on the government to release the research behind its decision to scrap the tank laws.
Deputy opposition leader Tim Mulherin said the housing minister should also say if he will ensure the savings are passed on to home buyers.
"If house prices do not fall by the claimed saving of $5000 to $6000 then home buyers will effectively be paying twice for their rainwater tank," Mr Mulherin said in a statement.
Mr Mulherin asked whether Mr Mander consulted with councils before announcing the decision.
He said the legislation change could force councils to invest more in water supply infrastructure.
"That in turn impacts on the cost to taxpayers and ratepayers," he said.