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Like the U.S., Australia too has been grappling with a housing crisis. And experts Down Under have floated a controversial fix: taxing unused bedrooms in people’s homes.
The idea stems from new research by real estate analytics firm Cotality, which found a mismatch between the number of people in a home and the number of bedrooms it has. According to Cotality’s head of Australian research, Eliza Owen, the most common household size is two people [1], while the most common dwelling has three bedrooms.
She acknowledged there’s “nothing wrong” with having more bedrooms than occupants, but argued it can create “inefficiencies” in how housing is allocated.
“It’s perfectly acceptable and desirable for people to have spare bedrooms,” Owen stated [2].
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“[But] you could ask them to pay for it through land tax or you could incentivise them to move on through the abolition of stamp duty or some combination of both.”
In a research note, she added that governments could “make it more expensive to have more housing than you need and cheaper to live in smaller housing” [1].
The unused bedroom tax is one of several ideas raised at Australia’s recent Economic Reform Roundtable. Treasurer Jim Chalmers has refused to rule out new taxes in upcoming budgets, fueling speculation about which proposals could actually make it into law [3].
But outside Canberra, the reaction has been swift and hostile.
On TikTok, Intersect Podcast unleashed an expletive-filled rant:
“I f—— bought my house with my hard-earned work and money, if you can’t keep up with your f—— housing crisis, that’s your fault. Don’t be f—— punishing me for having a spare bedroom and tax me on that s—” [4].
The clip struck a chord, racking up more than 10,000 likes.
In parliament, Senator Sarah Henderson blasted the proposal as “radical,” calling it a “crazy idea” and condemning the Labor Party for failing to rule it out [5].
Economists are skeptical, too. AMP Chief Economist Shane Oliver warned the tax would be deeply unpopular.
“That would cause a huge backlash politically as people often maintain spare bedrooms for visitors and it would be seen as a huge attack on empty nesters,” Oliver told news.com.au [3].
Meanwhile in America…
In the U.S., the problem of housing affordability has grown so severe that Treasury Secretary Scott Bessent recently warned: “We may declare a national housing emergency in the fall.”
Bessent did not outline specific steps the Trump administration could take, but said officials are studying ways to standardize local building and zoning codes, reduce closing costs and may even consider tariff exemptions on certain construction materials.
The stakes are high. Zillow estimates the U.S. is short 4.7 million homes [6] — a supply gap that has helped keep prices elevated. Coupled with high mortgage rates, the shortage has made homeownership increasingly out of reach.
Realtor.com calculates that a typical household in the U.S. would need to earn $118,530 annually to afford a median-priced home of $402,500 — more than 52% above today’s median household income of roughly $77,700 [7].
Yet despite these challenges, real estate remains a popular path to building wealth.
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What to read next
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[1]. ABC News Austroalia. “Bigger properties occupied by smaller households in major housing mismatch, Cotality finds”
[2]. The Sydney Morning Herald. “Call for ‘desirable’ spare bedrooms to be taxed to help fix housing”
[3]. news.com.au. “Aussies lose it over ‘spare bedroom tax’ plot”
[4]. @intersect.pod. TikTok post on Aug. 29, 2025
[5]. Senator Sarah Henderson. YouTube post on Aug. 26, 2025
[6]. Zillow. “US housing deficit grew to 4.7 million despite construction surge”
[7]. Realtor.com. “How Much You Need To Earn in Every State To Buy a Home”
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.