Reducing CO2-e emissions from residential buildings through more stringent building codes has gained increasing international focus. Concurrently, Australian houses have steadily increased in size from 1984 to 2009. This paper estimates the capacity of building codes to reduce residential emissions and achieve progressive reduction targets in light of increasing house sizes. A Residential Emissions Calculator was developed to compare heating and cooling loads for 72 new Australian houses—based on star ratings, historic Australian house sizes by state, and international house sizes. The analysis illustrates that house size has significant impact on the capacity of residential building codes to reduce emissions, and informs three key results: (1) Victoria is forecast to dominate emissions from new houses in Australia, (2) The increase in house size from 2003 to 2009 in Victoria decreased the effectiveness of moving from 5 stars to 6 stars by 38%, (3) Progressive CO2-e reduction targets of 80% could be achieved by a variety of house size and star rating scenarios (with significant housing affordability impacts). The result posit building codes and house size as potent strategies to limit energy associated emissions and underlines the need to apply these strategies in tandem as part of integrated national emissions management policy.