ELITE private schools are snapping up properties and turning themselves into Sydney's wealthiest landholders - despite still receiving government funding.

Once they have bought the land, the empire-building private schools are locked in "an arms race" to build increasingly bigger and better facilities than their rivals.

One elite school, The Scots College, is building a $6.5 million dormitory on $10 million worth of land donated by a school old boy that it only intends to use for less than four months of the year.

"What we are seeing here is part of an ever-expanding portfolio of assets while these schools continue to receive government grants and handouts," Australian Education Union federal president Angelo Gavrielatos said yesterday.

There are 913 private schools in NSW. In the 2010-11 financial year they received $3 billion in government funding - an average of $3.3 million each.

They charge pupils up to $30,000 a head to attend.

media_camera Private schools new building works at Knox Grammar. Picture: Supplied

By comparison, there are 2169 public schools in NSW which received a total of $10.7 billion in funding, or an average of $4.9 million each. They charge pupils nothing.

Among the big private spenders this year is Cranbrook School, which splashed out more than $15 million to buy a next-door property at Bellevue Hill, and the Roseville Anglican College for Girls, which paid $3.7 million for a Federation home in Roseville. Two years ago the college paid almost $3.7 million for another house in the same area in order to expand its base.

In recent years Wenona School paid almost $5 million for the Independent Theatre in Miller St, North Sydney, and Stella Maris College paid more than $5 million for the old Manly Fishos venue on Pittwater Rd at Manly.

media_camera Private Schools new building works. Sydney Grammar recital hall. Picture: Supplied

Sydney Church of England Grammar School (Shore) in North Sydney spent almost $39 million on a harbourfront estate in Edward St, North Sydney, and is spending a further $42 million developing the site.

The Scots College has bought two properties on Kambala Rd near its Bellevue Hill campus for $9 million. Angry local residents have complained it is a bid to increase campus size to pack in more fee-paying pupils.

Mr Gavrielatos said: "Australian governments have always made it clear that schools must be non-commercial to qualify for funding, but the question is what does 'non-commercial' mean?"

Private schools do not make profits, instead they carry surpluses which they can invest in property.

media_camera Private Schools new building works. Ravenswood School for girls, Mabel Fidler Building. Picture: Supplied

According to the My School website, in 2011 The Scots College had a gross income of $50 million and spent $6.7 million on capital expenditure. It still received more than $5 million in state and federal funding.

By comparison the nearest high school to the new Scots campus, Shoalhaven High at Nowra, had a total net income for the year of just under $12 million and capital expenditure of just under $400,000.

media_camera Private Schools new building works. Sydney Grammar recital hall Picture: Supplied

Dr Helen Proctor, senior lecturer at the Sydney University faculty of education, said the competition between elite private schools to build bigger and better facilities than their rivals was "like an arms race".

"The school councils are packed with builders, developers and architects who get carried away with the thought of their name on the plaque of the new building. It is disingenuous to say government fees are not going towards private school capital works. The grants free up money that would otherwise be used on operating costs."

Independent Schools of NSW's Dr Geoff Newcombe said few independent schools received government assistance for capital projects and they needed to run a surplus to fund capital works.

Buying up land enabled these schools to grow in areas where space was limited.

SCOTS COLLEGE TO BUILD $6.5 MILLION SOUTH COAST CAMPUS

ONE of Sydney's most elite private schools is building a $6.5 million campus in on the NSW south coast which it only plans to use for less than four months of the year.

The Scots College new campus is being built on land worth $10 million donated by a wealthy old boy and already boasts a Scottish Highland style house that will be home to the campus manager and a belltower which chimes on the hour.

The planning application for The Scots College new $6.5 million building at Wollumboola north of Jervis Bay describes it as accommodation for 100 students and 10 staff with kitchen, dining and learning spaces.

It is being built on three hundred hectares of land donated by school old boy and reclusive south coast businessman and benefactor Warren Halloran. He declined to comment on his gift to the school.

media_camera Private Schools new building works. Sceggs. Picture: Supplied

The Scots College already has a campus called Glengarry near the new site at Kangaroo Valley.

Scots Principal Dr Ian Lambert said: "Since 1989 the College has run its leading six-month outdoor education program for Year 9 boys at 'Glengarry' in Kangaroo Valley. In future years it is hoped the College will be able to extend outdoor education and sporting camp opportunities to other year groups at this new site."

He confirmed the building would only be used for 35 per cent of the school term. "During other times we hope it can be made available to local community groups and other schools."

Plans are in their very early stages and rely on The College raising enough money to be able to realise the vision."

CATHOLIC SCHOOLS PLAN FOR 7000 MORE STUDENTS

Catholic schools in Sydney are planning to expand or build eight new schools in the next five years to help cater for an extra 7000 students.

Dr Dan White, Executive Director of Catholic Schools, said: "The reason why there is need to expand some our existing schools and build new one is because of the continued growth of the popularity of our schools."

media_camera Students Sam Mattheos, Andre Hammer, Jonathan Dinoris and Michael Martinovic from Marist College in Penshurst.

The demand for more places was strongest in schools close to the city, where families were moving into apartments, and where new land had been released in the South-west.

"There is surging demand in areas around Concord, Homebush, Mascot and other inner city suburbs where there has been significant urban consolidation," he said.

Young families were moving to the South-west and new schools would need to be built there.

One of the schools slated for expansion is Marist College Penshurst, which will be developed from a boys school for years 7 to 10 to a co-ed school for years 7 - 12 in 2015.

"The reality is that much of the capital cost of building those schools will need to be met by our parents. Catholic schools no longer receive state subsidies on interest rate for capital works, and new schools have to be built in stages, which means we often have to rely on demountable classrooms or other temporary buildings," said Dr White.