Passivhaus (PH) has gained global recognition for its energy-efficient features despite a 5% to 10% higher construction cost than traditional houses, especially within European countries. However, its adoption and popularity have not met the same fate in other countries like New Zealand. The higher upfront cost has been critical to the slow adoption of the PH movement in New Zealand. This study aimed to demystify the mist around the cost of PHs with a focus on the effects of drivers and barriers on their life cycle costs (LCCs). As such, a systematic literature review was conducted to provide a comprehensive understanding of the cost implications associated with PH. Using the preferred reporting items for systematic reviews and meta-analyses (PRISMA) review method, we examined 71 past studies on PHs from 2005 to 2023. We found that the drivers of PHs include reduced heating demand, increased thermal comfort, and indoor air quality (IAQ). Research showed that the rising market for PHs is fueled by climate change, environmental awareness, innovative materials and technologies, individual commitment, improved regulations, pilot studies, research efforts, and governmental funding and initiatives. However, PHs face significant challenges such as increased complexity, advanced technology, higher initial investments compared to conventional and low-energy houses, national requirements, overheating, difficulties in affording the technologies, and a lack of options in the market. Despite the wealth of research on the economic aspects of PH, there is a lack of in-depth studies exploring the LCC of PHs focusing on cost commitments and benefits. Such studies are essential for assessing and optimising the cost-effectiveness of PH, considering different climates and regions, and comparing them with other low energy standards. The findings of our review provide a crucial focus for PH stakeholders in assessing the long-term financial viability of PH projects, thereby improving decision-making and facilitating effective planning for sustainable and cost-effective housing.