Prime Minister John Key said MPs using government money to pay rent on electorate offices is in fact saving money for the taxpayer.
The Dominion Post reported on Saturday that an investigation showed seven MPs had bought properties they used as out-of-Wellington offices, billing the taxpayer for the rent.
Some were owned in the MP's own name, while others were held through superannuation funds or companies.
The loophole allowed them to walk away with substantial capital gains, the paper said.
Mr Key was one of the MPs named and he told journalists today that he and other MPs were "subsidising the taxpayer".
In his case a property valuation had been done in 2002/2003 and the rent had been set lower than that and had never since increased.
Mr Key said he had no problem with MPs owning their office accommodation as long as it was fair and within the rules.
The Auditor-General's office, already investigating a complaint about the accommodation allowance paid to Finance Minister Bill English, is considering whether to expand its inquiry into MPs' accommodation allowances.
A spokeswoman for the office said it was seeking information from Parliamentary Service, which administers MPs allowances.
Mr English paid back the $12,000 and stopped claiming an out-of-town allowance following publicity he was claiming the allowance but lived largely in Wellington.
The Green Party has also been criticised for paying above market and double rent for houses owned by its superannuation scheme.
It has since announced it will sell the properties.
