Negative gearing calculator.

A property is tax-negative when deductible interest, rates, strata, insurance, management, repairs and depreciation exceed its rent. In 2026/27 a supported rental loss can generally reduce other taxable income. From 2027/28, losses from affected established residential property cannot reduce wages: excess losses are quarantined for residential-property income, gains and carry-forward treatment. Grandfathered interests and statutorily eligible new builds are treated separately.

For 2026/27 we compare resident income tax plus Medicare on salary and entered residential income before and after the supported rental loss. For an affected established property from 2027/28, the calculator first applies the loss only to entered residential-property income and carries forward any excess; it shows no wage-offset benefit. Where a levy-inclusive 2027/28 amount depends on thresholds that are not yet registered, the numerical benefit is marked unavailable.

Depreciation is a non-cash deduction: the wear on the building and its fittings is claimable against your taxable income, but you don't actually pay it out each year, that cash left your account when the property was built or bought. So it increases the tax benefit without changing the money leaving your account, which is why it appears in the deductible expenses but not in the weekly cash-flow. A quantity surveyor's depreciation schedule is what substantiates the claim with the ATO.

It is estimated property cash flow each week: rent in, minus cash expenses and the full loan repayment, plus any supported immediate tax reduction spread across the year. Principal affects this cash figure but is never counted as a deduction. If the selected year's levy-inclusive tax estimate is not supportable yet, the after-tax weekly figure is also withheld.

The recurring costs of earning the rent are generally deductible in the year you pay them: loan interest (not the principal), property management fees, council rates, strata levies, water charges, landlord insurance, repairs and maintenance, advertising for tenants, land tax and accounting fees. Depreciation on the building and its fittings is claimable too, via a depreciation schedule. Capital costs, the purchase price, stamp duty, renovations and improvements, aren't deductible up front; they go into the CGT cost base instead. Keep receipts for everything and let your accountant classify the borderline items.

Where a rental loss is permitted to reduce salary, its immediate effect depends on the tax and Medicare rates applying across the affected income bands. From 2027/28 that wage offset is unavailable for affected established residential property, regardless of salary; eligible residential income can absorb the loss and any excess is carried forward. The calculator therefore determines the property's dated treatment before estimating any reduction.

Whenever rent overtakes the total of deductible costs, and it usually happens gradually rather than by decision: rents rise over time while a principal-and-interest loan balance falls, shrinking the interest bill each year. Rate cuts, a lump-sum repayment or an interest-only period ending can all flip the sign. It's worth re-running the numbers annually, because the switch changes your tax position, the loss and its deduction disappear, and surplus rent becomes taxable income. Positive gearing isn't a problem, it just means the property now pays for itself.

Rental deductions and capital gains are distinct calculations, but enacted rules can connect them. From 2027/28 a quarantined residential loss may be applied through the statutory residential-gain and carry-forward ordering rules rather than against wages. Costs already deducted cannot also be counted in the CGT cost base. The post-1 July 2027 CGT framework is itself date- and property-dependent, so obtain advice rather than assuming the historic 50% discount.

Only if the capital growth outpaces the losses. Negative gearing means losing money every year on purpose, softened but not eliminated by the tax deduction, in the expectation that the property's value will rise by more than the accumulated after-tax shortfall. In a strong market that trade has historically paid off; in a flat one you simply lose money slowly. The 'per week to hold' figure in this calculator is the honest cost of the bet. Weigh it against realistic growth for that specific property, and get advice on your circumstances.

A tax depreciation schedule is a report, prepared by a qualified quantity surveyor, that itemises what you can claim each year for the wear on the building's structure (capital works) and its fixtures and fittings (plant and equipment). It typically costs a few hundred dollars, is itself deductible, and lasts the life of your claim, often 40 years. For newer or renovated properties the deductions can run to thousands per year, frequently the difference between a modest and a substantial tax benefit, so it's usually one of the first things worth ordering after settlement.