Negative gearing calculator

How to calculate negative gearing — the three lines that matter

1. Rental result = annual rent − (interest + expenses + depreciation). Negative = negatively geared.
2. Tax effect = the loss × your marginal rate (this calculator uses the exact FY 2026–27 brackets and Medicare levy, not a flat guess).
3. True cash cost = cash in minus cash out, after the refund — with depreciation added back, because it reduces tax without leaving your pocket.

The same property at different interest bills

$600/week rent, $8,000 expenses, $6,000 depreciation, $100,000 income — watch the after-tax weekly cost move with the loan:

The deductions checklist — what belongs in each field

Interest field: only the interest portion of your repayments (on an interest-only loan, that's the whole repayment; on principal-and-interest, check your loan statement — the principal is never deductible). Expenses field: council rates, water, landlord and building insurance, property management fees (typically 6–8% of rent), repairs and maintenance, body corporate levies, land tax, pest control, advertising for tenants, and accounting fees. Depreciation field: the annual figure from a quantity surveyor's schedule (a few hundred dollars to prepare, itself deductible) — capital works at 2.5% a year plus fittings, noting that for established homes bought after mid-2017 you generally can't depreciate second-hand fittings, only the building. Not deductible anywhere: stamp duty and buying costs (they join the CGT cost base), renovation costs (depreciated, not expensed), and travel to inspect the property.

The 2027 rules — negative gearing just changed

The Treasury Laws Amendment (Tax Reform No. 1) Act 2026 (assented 26 June 2026) rewrites this page's subject for some buyers. From 1 July 2027, losses on established residential property bought after 7:30pm AEST on 12 May 2026 stop offsetting salary — they're quarantined against residential rental income and carried forward instead. Three groups are untouched: anyone who bought before Budget night 12 May 2026(grandfathered), buyers of brand-new dwellings, and everyone until the start date — FY 2026–27 works exactly as this calculator shows for all owners. Pick your purchase timing above and the calculator shows what your refund looks like on both sides of 1 July 2027.

One limit worth stating plainly: everything above is for a single property. Once losses are quarantined, a loss is applied against your other residential rental income before any of it carries forward, so an investor holding several properties is in a different position from someone holding one. The detailed rules for that have not been published, and this calculator does not model it. If that is your situation, the figures here are the single-property case, not yours.

The honest caveat

Negative gearing is a loss with a partial refund — not free money. The strategy only wins if capital growth (taxed later, usually with the 50% CGT discount) outruns the accumulated after-tax losses. Rising rents or falling rates can flip a property positive over time; this calculator shows exactly where you stand each year. Holding costs like land tax belong in your expenses line.