The Dominion Post reported today 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.
Some of the arrangements went back more than a decade, but it appeared a new intake of MPs was stepping up the practice.
Most were from National, but Labour used a variation of the practice by buying properties in its name and using them as electorate offices, charging the taxpayer rent and building up the party's property assets.
It was revealed yesterday that the Auditor-General's office was considering expanding an inquiry into MPs' allowances.
The Auditor-General is currently investigating a complaint about the accommodation allowance for Finance Minister Bill English.
A spokeswoman said yesterday the office was looking at whether a wider inquiry into accommodation allowances was needed.
The office 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.
