Australia’s Spare Bedroom Tax and the Madness of Mismanaged Migration, By James Reed
Australia's housing crisis has reached a fever pitch, and the latest "solution" is a masterclass in madness: a proposed tax on spare bedrooms to force homeowners to downsize. As reported by ZeroHedge on August 27, 2025, Cotality Australia's Eliza Owen argues that taxing extra rooms, used by 61% of households with just one or two people, will free up space for a nation grappling with soaring rents and a shortage of 250,000 homes. This comes amid a record immigration surge, with 518,000 net migrants in 2023 alone, per ABS, driving demand that outstrips supply. Rather than curb inflows, policymakers target citizens' hard-earned homes, blaming them for a crisis fuelled by unchecked migration. From bedroom taxes to imputed rent schemes, this immigration mania punishes locals, deepens inequality, and risks societal fracture, all while dodging the real issue.
The Spare Bedroom Tax: A Symptom of Madness
Cotality's proposal, floated at the 2025 Economic Reform Roundtable, is deceptively simple: tax households with "unused" bedrooms to push downsizing, freeing up three- and four-bedroom homes that dominate Australia's housing stock (75% of dwellings, per Cotality). Eliza Owen told news.com.au that governments could "make it more expensive to have more housing than you need," suggesting a land tax hike or stamp duty abolition to incentivise mobility. With 1.3 million two-person households in three-bedroom homes and 27% of homes housing solo occupants (2021 Census), the idea is to reallocate space for younger families priced out by median home prices of $785,000 (CoreLogic, 2025).
Critics like Alexandra Marshall at The Spectator call this "sinister." Why punish Australians who worked decades for their homes? Spare rooms aren't idle, they're home offices, guest spaces, or future family rooms. 3AW (July 11, 2023) notes 7.4 million Australians live in "oversized" homes, but Michael Fotheringham of the Australian Housing and Urban Research Institute argues these spaces serve vital purposes, not waste. Taxing them feels like a Marxist grab, echoed by Professors Siminski and Wilkins' push to tax "imputed rental income" and scrap capital gains exemptions, costing homeowners $50 billion annually (ZeroHedge). X posts mock this as "modern-day robbery," taxing people for living in their own homes.
Immigration: The Real Driver of the Crisis
The housing shortage isn't about bedrooms, it's about bodies. Australia's net migration hit 518,000 in 2022-23, with 1.1 million arrivals (ABS), the highest since the 1960s. This influx, driven by international students (670,000 in 2024) and temporary workers, fuels a 40% rent surge since 2020 (SQM Research). The government's goal of 1.2 million new homes by 2029 is 250,000 behind schedule (news.com.au, August 25, 2025), as construction costs soar 30% post-COVID (ABS). Meanwhile, approvals for "missing middle" housing, townhouses and low-rise apartments, lag at 40%, per Domain (August 20, 2025), unable to match demand from smaller households.
Immigration's impact is undeniable. Macrobusiness (2024) estimates each 100,000 migrants require 40,000 new dwellings, yet only 170,000 homes were built in 2023. Pre-2005, net migration averaged 100,000 annually, keeping housing affordable; post-2005, it tripled, with prices doubling. RBA (2025) notes that if household sizes returned to 1980s levels (2.8 people), 1.2 million fewer homes would be needed. Instead, policymakers scapegoat "empty nesters" while issuing 557,041 visas in 2024, including 54,000 from high-risk countries (Home Affairs). This mania, importing millions while taxing locals' spare rooms, defies logic.
The Cultural and Economic Toll
The fallout isn't just economic; it's cultural. Mass immigration, without integration, strains social cohesion. The Australian (August 26, 2025) reports rising community tensions in Sydney's west, where migrant-heavy suburbs face overcrowded schools and hospitals. A 2024 Pew survey found 55% of Australians view immigration as a burden on public services, echoing UK protests over migrant-related crime (Telegraph, August 26, 2025). Taxing spare rooms to accommodate more migrants risks amplifying these tensions, as locals feel squeezed out of their own country.
For capitalists, this is a losing game. CBO (2024) projects immigration boosts GDP by $7.8 trillion over a decade, but Penn Wharton (2016) shows low-skill migrants strain local budgets, with education costs up 20% in migrant-heavy areas. Young Australians, facing up to $1,200 monthly rents (SQM), can't buy homes, stunting economic mobility. AEA (2024) warns that cultural fragmentation reduces support for redistribution, hitting consumer confidence. If unrest erupts, as in France's 2023 pension riots, businesses lose billions. Taxing private homes while ignoring migration's role is a recipe for instability, not growth.
A Saner Path: Cut Immigration
The spare bedroom tax is a distraction from the real fix: curbing immigration to sustainable levels. Pre 2010, Australia capped inflows at 100,000 annually, balancing growth with stability. A return to 100,000, prioritising skilled migrants, could ease housing pressure, per Macrobusiness. Streamline construction, RBA (2025) suggests cutting red tape to boost approvals 30%. Incentivise "missing middle" housing, not punitive taxes. CEDA (2025) proposes exempting spare room rentals from pension tests, freeing 13 million bedrooms without coercion. Transparency on migration data, as demanded by Migration Central, would rebuild trust.
Australia's immigration mania, importing half a million people yearly while taxing grannies' guest rooms, is madness, and cruel. It punishes citizens, deepens inequality, and courts unrest. The housing crisis demands pragmatism, not Marxist fantasies. Cap migration, build smarter, and let Australians keep their homes. Anything less is just more insanity.
Comments