Jessica Colby
Liberty Itch
On the 15th of August 2025, the ABC published an article detailing a proposal by two economists, Peter Siminski and Roger Wilkins, advocating for what they called ‘imputed rent’. This refers to the idea that since people who rent have the burden of paying rent, people who own homes should also have to pay ‘rent’ on their own homes (a tax) to make things more equitable.
In my previous article The Problems with Property Taxes, I expressed my opposition to having to pay rent on your own property, the various problems with property taxes, and to the various increasing taxes that we need to pay. This proposed policy seeks to add another tax on top of property taxes.
I believe this proposed policy is driven by jealousy and assumptions about home ownership.
First, the policy does not consider the various costs that homeowners already pay. Unlike those who rent, homeowners always pay for utilities themselves. Homeowners are also responsible for the costs of repairing their home, insurance and other costs associated with home ownership, such as property taxes and strata fees. They also take on more risk.
When supply meets demand, things become more affordable, and we should focus on eliminating and changing policies.
Second, it assumes that all people who own houses are rich while all people who rent are poor. This is a myth: there are many rich people who choose to rent, often to avoid the logistical difficulties and taxes incurred when buying and selling property.
There are also many poor people who own their own properties. That includes working-class families who bought a house when it was more affordable, older people, young people who inherited a house but don’t still earn much, people who made significant personal sacrifices to work to afford a house, and those who simply got lucky.
These people often fall into a category known as ‘asset rich, cash poor’. Such individuals may own assets but have little to no cash that can be quickly utilised to pay for things. People in this category, if faced with even a slight increase in costs, can be forced to dispose of their assets. That means selling the house, which would mean that the level of income required to own a house under this policy will increase.
This proposed policy of course does very little to help those who rent. In fact, the rental market would suddenly have more competition between potential renters because of the situation above, while current renters still won’t be able to buy a house. Even if someone were to save up enough to buy a home, it would be now far more difficult to afford to retain it.
There are many rich people who choose to rent, often to avoid the logistical difficulties and taxes incurred when buying and selling property.
The long-term cost of retaining a home would significantly outweigh any temporary drop in housing prices in the long run and would result in home ownership being more centralised with fewer owners, which would increase inequality and achieve the opposite of what the policy is intended to achieve.
Third, it does not address the real causes of high housing costs. To reduce costs, it would be more sensible to eliminate government policies that restrict the supply of housing. Some examples include the intense bureaucracy that makes it difficult, costly and time consuming to build houses, including zoning restrictions that limit where and what types of housing can be built on a particular property.
When supply meets demand, things become more affordable, and we should focus on eliminating and changing policies that limit the supply of housing rather than instituting misguided policies driven by jealousy. It is better to address the actual reasons why housing is so unaffordable.
This article was originally published by Liberty Itch.
