Tallyroo.

Australia · FY 2026–27

Rentvesting, with the catch priced in

Rent where you want to live and buy an investment, or buy the home: see which leaves you ahead, tax included.

FY 2026-27 rates · verified against the official sources.

Example rate — use your own.

Outgoings, land tax and growth assumptions

Home outgoings are rates, insurance, maintenance and strata; the investment's also carry management. Land tax lands on the investment only — take the figure from the land tax calculators, because it needs a land value, not a price. Building depreciation is the Division 43 capital works deduction from a quantity surveyor's schedule (nil for a building begun before 18 July 1985); fittings are left out, because on a second-hand home they generally cannot be claimed. Rent rises on both sides and the two do not cancel: the rent you pay is not deductible, the rent you receive is assessable. Set both growth rates to nil to hold everything flat.

Counted in the result from the panel above: $6,500 and $6,500 a year of outgoings, 2 weeks vacant, $5,000 a year of building depreciation, and rent rising 3% a year.

Growth is applied to both properties at the same rate, because assuming one grows faster than the other is the assumption that decides the answer.

Your tally

Buying to live in is ahead by

$115,276

After 10 years, buying to live in leaves $821,784 of property wealth and rentvesting $463,110, after any tax on selling. The gap above also counts the day-one costs and the cash each one took to hold.

Side by side

Buy to live in Ahead

Stamp duty$43,687
LMI$23,232
Registry fees$365.46
Cash cost, year one$66,640
Cash over the term$675,915
Growth over the term$691,784
Capital gains taxNil
Wealth at the end the property less the loan, after tax$821,784
Net position less the deposit and all the cash it took-$51,415

Rentvest

Stamp duty$23,437
LMINone
Registry fees$365.46
Cash cost, year one$40,391
Cash over the term$475,999
Growth over the term$408,782
Capital gains tax−$75,671
Wealth at the end the property less the loan, after tax$463,110
Net position less the deposit and all the cash it took-$166,691
How far behind each strategy ends up

When the cheaper one on cash changes

Not within 10 years. Counting day-one costs, rentvesting stays the cheaper of the two on cash for the whole term.

What the exemption alone is worth

$75,671 — the capital gains tax the rentvester pays and the owner-occupier does not. On stamp duty it is the other way round: buying the home pays $20,250 more on day one.

What the 2027 quarantine does here

$99,723 of losses from year two stop reducing your salary. Instead, $99,723 goes against the gain on sale.

Next: the investment side on its own, week by week → Investment property calculator

The 2027 rules, as modelled. Year one counts as 2026–27, before the quarantine starts; from year two an established investment's loss is quarantined. The capital gains line uses the 50% discount, which an established home sold after 30 June 2027 will not get — what replaces it is not modelled, so for an established home read that line as indicative. Both properties grow at the same rate, and the answer is only as good as that assumption.

Who this models: Single Australian resident for tax purposes, no other offsets. Family and senior Medicare thresholds, SAPTO and the Medicare levy surcharge are not modelled.

The number the decision turns on

Rent where you want to live, buy where you can afford. The capital gains tax exemption you give up on a home is the line this comparison turns on, so it is counted here beside the stamp duty, the LMI and the cash — and so is the 2027 rule that quarantines an established investment's losses.

The case for rentvesting is access: live where you want, own where you can afford. The case against it is a tax line that only appears when you sell. A competing rentvesting page we opened in September 2026 names that line — the main residence exemption — but its calculator returns no capital gains figure, and without a figure you cannot see whether the exemption changes your answer.

A home you live in is generally exempt from capital gains tax for the years it is your main residence; an investment property has no such exemption. The longer you hold and the faster prices grow, the larger the tax on the investment's gain becomes.

The honest counterweight, which belongs here rather than buried: the investment earns deductions a home never could, and this calculator counts them. For an investment bought now, a loss cuts the tax on your salary in 2026–27 only — from 2027-28 a loss on an established home is held back for the property's own rent and its eventual gain. The exemption is the price of the deductions, and whether the trade is worth it is what the figures above are for.

What changes when the property is an investment

The differences between buying a home to live in and buying an investment: capital gains, stamp duty concessions, land tax, deductibility and flexibility.
 Home you live inInvestment
Capital gains on saleGenerally exemptTaxable; on growth from 1 July 2027 only a new build keeps the 50% discount
First home buyer concessionWhere your state has oneNever
Land taxGenerally exemptIn every state above a threshold, in the ACT from the first dollar; none in the NT
Interest and outgoingsNot deductibleDeductible; for one bought now, a loss stops reducing salary from 2027-28 unless it is a new build
Where you liveFixed by what you could affordWherever you like, at a landlord's discretion

The last row is the one the arithmetic cannot price, and it cuts both ways. Rentvesting buys flexibility about where you live and sells certainty about how long you stay. Whether that trade is worth a number of dollars is not a question a calculator can answer.

When it wins, and when it does not

Rentvesting tends to be ahead where the home you actually want costs far more than the investment you would buy instead, where renting in your suburb is cheap relative to buying there, and over shorter horizons, before the tax on the investment's gain has grown large.

It tends to fall behind over long horizons with strong growth. Push the years field out and watch the capital gains line grow with it.

What this page does not model, and says so rather than absorbing into an estimate: the capital gains regime that replaces the 50% discount for an established home sold after 30 June 2027, which could move that line either way; plant and equipment depreciation, which a second-hand home generally cannot claim; any tax deduction for LMI on the investment loan; and land tax unless you enter it, because it needs a land value rather than a price.

Frequently asked questions

What is rentvesting?
Renting the home you want to live in while owning an investment property somewhere you could afford to buy. The appeal is obvious: a foothold in the market without moving to where you can afford to live, with a tenant helping to carry the loan. The catch is not obvious, which is why this page prices it rather than describing it.
What is the catch?
The main residence exemption. Sell the home you live in and the gain is generally free of capital gains tax; sell an investment and it is not. On the example figures, using the current 50% discount, the rentvester owes $75,671 of it at the end of 10 years, against $23,437 of stamp duty paid on day one. Knowing the exemption exists does not tell you whether it changes your answer; a figure does. The counterweight is that an investment earns deductions a home never could, and this calculator counts them.
Does rentvesting cost me the first home buyer concession too?
On the purchase, yes, wherever there is one to lose. A first home buyer concession is for a home you move into, so buying the same property to rent out pays the investor rate from the first dollar. Two places have nothing to lose: Tasmania’s exemption ended on 30 June 2026, and the Northern Territory has no general first home concession. In South Australia the relief covers new homes only, so the established home this comparison assumes pays the ordinary rate either way.
Is rentvesting ever the right answer?
Yes, and the calculator says so when the numbers do. Try the rent field first: on the example figures, dropping the rent you would pay from $700 to $400 a week moves the result from buying ahead by $115,276 to rentvesting ahead by $63,560. None of the rent you pay is deductible, so every dollar of it lands on the rentvesting side in full.
How does the calculator handle land tax?
As a figure you enter, charged to the investment only, because a home you live in is generally exempt. It cannot be worked out from a price: land tax is assessed on land value, every state adds up everything you own before applying its threshold, the ACT charges each rented home separately from the first dollar, and the Northern Territory has none. So run the land tax calculator for your state with the land value and put the yearly amount in the land tax field. It is a deductible holding cost, so it is treated like the other outgoings, including under the 2027 quarantine.
Does the 2027 reform change this?
Yes, in two halves, and only one of them is modelled. Modelled: an investment bought now is contracted after 7.30 pm on 12 May 2026, so unless it is a new residential dwelling its losses are quarantined from the 2027-28 income year — they no longer reduce your salary, carry forward against later rent from the property, and go against the gain when you sell. Not modelled: for an established home, a gain accruing from 1 July 2027 loses the 50% discount and is indexed instead, with a 30% minimum rate, and the method for splitting a gain either side of that date is still an exposure draft. A new build keeps negative gearing and the discount, but what counts as new has not been enacted.

Keep tallying

Calculator

Investment property calculator

The investment side on its own: cash to get in, weekly cost to hold, and the rent that would break even.

Open calculator →

Calculator

Rent vs buy calculator

The simpler question underneath this one — renting and investing the difference, against buying.

Open calculator →

Calculator

Capital gains tax calculator

The exemption in detail, including the six-year absence rule and the partial main residence maths.

Open calculator →

Guide

Negative gearing changes 2027

What the Act says about the deductions and the discount this strategy leans on.

Open calculator →

Sources

  • Stamp duty at owner-occupier, first home buyer and investor rates: each state revenue office's FY 2026-27 schedule, verified 2026-08-27. Registry fees and indicative LMI come from the same engines as the upfront costs calculator.
  • Capital gains: the 50% discount for individuals holding over twelve months, taxed at ATO FY 2026–27 marginal rates including Medicare levy, on a cost base of the price plus stamp duty (in the ACT the duty is deducted instead) less the capital works claimed. Replaced from 1 July 2027 for an established home — see the reform page.
  • The loss quarantine: Treasury Laws Amendment (Tax Reform No. 1) Act 2026, s 26-155, from the 2027-28 income year for a dwelling contracted after 7.30 pm on 12 May 2026. Land tax on a rental is deductible: ATO, Rental properties 2026.
  • The main residence exemption is ITAA 1997 Subdivision 118-B. No growth rate is asserted: the figure in the form is yours, and it is applied equally to both properties.