Australia’s ‘Spare Bedroom Tax’ Proposal Sparks National Backlash

Aussies have slammed a new proposal to tax homeowners living in properties with unoccupied bedrooms.

Property research group Cotality last week proposed to the Albanese Government that it introduce a tax on homeowners who refuse to rent out spare bedrooms.

The call followed the Economic Reform Roundtable from which Treasurer Jim Chalmers claimed the tax system was 'imperfect' before refusing to rule out new taxes.

Online finance guru Andy echoed thousands of Aussies by condemning the proposed tax in a video on Tuesday.

'If you're in a home with three or four bedrooms, and you are not occupying those bedrooms with family members, you are supposed to rent it out,' she said.

'You rent a bedroom out to give someone a roof over their head, then the government's going to put you in the capital gains tax bracket.

'Seriously, we cannot get ahead. The taxes in Australia are killing us right now.'

Social media users agreed with Andy, with many slamming the proposal for encroaching on their home.

'I've worked hard for my home. I'm not renting out to anyone. My home is my safe place after working. I refuse to let a stranger into my home,' one wrote.

'I don't want to share my house with a stranger. How dare the government think they have that sort of power!' another said.

'How many people are renting Albo's spare rooms?' another wrote.

'I think we should have a politician tax. Every time they float an idea that is out of touch with reality, they should be taxed,' another said.

'No thanks. I don't feel safe walking down the street, let alone having a stranger in my house,' another wrote.

As the Albanese government struggles with its goal to build 1.2million new dwellings within the next four years, new data found more than 60 per cent of Aussie households consist of just one or two people.

Yet, data from the 2021 Australian Census showed more than 1.3million two–person households were living in three–bedroom homes, outnumbering households with three or four residents in similar dwellings.

Cotality described the situation as a 'stark mismatch' between Aussies who live in homes and the type of housing dominating the market.

Cotality's head of research, Eliza Owen, argued the imbalance was affecting housing affordability and supply pressures.

'While there's nothing wrong with having more bedrooms than people in a dwelling, there could be some inefficiencies in the way housing is being allocated,' Ms Owen told ABC Radio.

Data also revealed families with dependents made up around 30 per cent of households, couples without children 31 per cent and people living alone 27 per cent.

Yet the most common dwelling size remains three bedrooms or more.

One person households account for over a quarter of homes, but one–bedroom or studio apartments represent just six per cent of housing stock.

Ms Owen acknowledged that many households have their reasons for larger homes.

'With the rise of the home office, the desire for in–home care later in life, and space for hobbies and visitors, having additional bedrooms is potentially very attractive,' she said.

'It's also reasonable to assume many couple households without dependents have more bedrooms because they are planning to have children.'

But Ms Owen argued that bold reforms are needed to address the housing crisis.

'Governments could make it more expensive to have more housing than you need, and cheaper to live in smaller housing,' she said.

Others have advocated for tax changes, such as abolishing stamp duty, which can discourage mobility, and replacing it with a broad–based land tax that would increase costs based on the amount of land a household owns.

'It seems unfair to ask younger households to pay higher prices for stock that is being utilised by older households,' Ms Owen added.

Before the Economic Reform Roundtable, Prime Minister Anthony Albanese insisted his government would not introduce any new taxes before the next election, due in May 2028.

When fronted with the new tax proposals by academics at the summit, Albanese said they were allowed to 'have ideas' but weren't 'government representatives'.

'Academics talk in the academic world, what I do is live in the real world,' he told the ABC on Monday.