A leading local builder has warned new home owners to scrutinise any claims made by construction companies of having to dramatically increase costs because of the carbon tax.

The tax came into force earlier this week, and David O'Brien from G.J. Gardener Homes says while it will have an impact, it should be nothing beyond increasing prices by more than 1.7%.

Overnight the parent company of BRUMBYS bakeries  was forced to  apologise over the advice given  to franchisees over the carbon tax.

An internal memo recommended an increase in prices and let the carbon tax take  the blame.

In the construction industry builders wont pay the carbon tax directly, although they will be effected, and Mr O'Brien says new home buyers need to look at the breakdown of any cost increases.