Law change: The Australian Government has legislated changes to negative gearing. From 1 July 2027, rental losses on residential properties purchased after 7:30pm AEST on 12 May 2026 can generally no longer be deducted against your other income (losses are quarantined against rental income instead). New builds and properties purchased before 12 May 2026 are not affected. This calculator reflects the current rules, which apply to all investors until 30 June 2027.
Negative Gearing CalculatorAustralia — 2025–26
Calculate your property investment tax benefits, cash flow, and required capital growth.
Investment Details
Include rates, insurance, maintenance, property management, depreciation, etc.
Under the 2026 law change, from 1 July 2027 this property's rental losses will be quarantined — deductible against rental income only, not your salary. The tax savings shown apply only until 30 June 2027. Quarantined losses carry forward.
Summary
Tax Rate
Annual Rent
Annual Loan Payment
Total Expenses
Net Cash Flow
Tax Impact
Annual Cost to Hold
Required Annual Capital Growth
Annual Breakdown
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How Negative Gearing Works in Australia
How Does Negative Gearing Work?
Negative gearing happens when your investment property costs more to hold than it earns in rent. The shortfall — your net rental loss — is deducted from your taxable income, reducing the tax you pay on your salary and other earnings. The bigger your marginal tax rate, the larger the tax saving.
Is Negative Gearing Worth It?
Negative gearing is only worthwhile if your property grows in value faster than the after-tax cost of holding it. A common mistake is chasing the tax refund while ignoring that you are losing money each year. The calculator above helps you estimate whether the numbers stack up for your situation.
Negative Gearing Example
You earn $120,000 salary and own an investment property generating $25,000 in rent with $35,000 in expenses (interest, rates, depreciation, management). Your $10,000 net loss reduces your taxable income to $110,000. At a 37% marginal rate, that saves you $3,700 in tax — but you are still $6,300 out of pocket after the refund.
Investment Property Tax Deductions
Deductible expenses include mortgage interest, council and water rates, property management fees, landlord insurance, repairs, depreciation on fixtures, and capital works deductions (2.5% of construction cost for eligible properties). Travel to inspect the property is no longer deductible for residential investors.
Frequently Asked Questions About Negative Gearing
Common questions about property investment tax benefits, deductions, and cash flow
Official ATO Information
For official rules, thresholds, and eligibility criteria, refer to the Australian Taxation Office.
View ATO Rental Property Tax InformationRelated Articles
General Information Only
This calculator provides general information only and does not constitute personal financial advice. Results are estimates based on the inputs provided and current ATO rates. Your actual tax obligations may differ. Please consult a licensed financial adviser before making any financial decisions.
This calculator shows year one. But will this property actually build your wealth over time — or just keep you busy?
Interest rates change, vacancies happen, and the real return depends on more than the tax deduction. Let's stress-test your numbers before you commit.
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