Negative gearing calculator.
Your rental property's loss or profit, the tax it saves or costs at your marginal rate, the after-tax cost per week — and what the 1 July 2027 rules do to it.
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Negative gearing, step by step.
Quick answer
Net rental result = rent − interest − other expenses − depreciation. If negative, it reduces your taxable income and the tax saving is roughly your marginal rate (plus 2% Medicare) times the loss. From 1 July 2027, that offset against wages only continues for properties held at 12 May 2026 and for new builds; losses on other established properties are quarantined to residential property income and carried forward.
The four steps
- Rental income — weekly rent × weeks let. Vacancy matters: two empty weeks on $520 is more than $1,000 of income gone.
- Cash deductions — loan interest (the investment share only), rates, land tax, insurance, property management, advertising, body corporate administration levies, repairs and maintenance. Your cash position is income minus these.
- Non-cash deductions — capital works at 2.5% a year of construction cost for most buildings built after 15 September 1987, and decline in value of plant and equipment (for second-hand residential property, generally only items you bought new). These deepen the taxable loss without costing you anything this year.
- Tax effect — the calculator works out your tax with and without the rental result at the resident rates for the year, including the Medicare levy. The difference is the saving (or, for a positively geared property, the extra tax).
What the 2027 column shows
For an exempt property or a new build the right-hand figure equals the left: nothing changes. For an established property bought after 12 May 2026, the calculator first offsets the loss against any net income you enter from other residential property, then quarantines the rest — so the tax saving against your salary falls to zero and the unused loss is shown as carried forward. The deductions have not disappeared; they wait for a year with residential property income or a capital gain to use them against. Read the full explainer for the rules and what to do before the start date.
What it leaves out
Capital gains tax on sale (use the CGT calculator), the low income tax offset and other offsets, HELP repayments on the changed income, principal repayments on the loan (not deductible), and the effect of depreciation claims on your cost base. It treats the whole year at one set of figures; a mid-year purchase is apportioned in your return.
Sources: ATO — Residential rental properties, Tax reform: reforming negative gearing and capital gains tax, Resident tax rates. Estimates for general information only — not tax, financial product or credit advice.
Rental schedules done properly.
Interest, agent statements and depreciation reconciled, co-owners split correctly, a running cost base kept for the sale year — for investors anywhere in Australia, as part of your tax return.
Negative gearing — your questions.
How does negative gearing reduce my tax?
If your rental property's deductible expenses exceed the rent, the loss reduces your taxable income. At a 30% marginal rate plus 2% Medicare levy, each $1,000 of loss cuts your tax by about $320. The calculator works this out precisely by comparing tax on your income with and without the loss, using the resident rates for the year you choose.
Why is my tax saving smaller than my cash loss?
Because the saving is only your marginal rate times the loss. The rest is money you have genuinely spent. A $13,000 cash shortfall with a $6,000 tax saving still costs you $7,000 a year — the investment only makes sense if capital growth exceeds that.
What changes on 1 July 2027?
Losses on an established residential property bought after 7:30 pm AEST on 12 May 2026 can no longer be offset against wages or other non-property income. They can be offset against other residential property income, including capital gains, and the excess carries forward. Properties held at 12 May 2026 are exempt, and new builds keep full negative gearing. Pick your property's category in the calculator to see the effect.
Does depreciation count towards the loss?
Yes. Capital works deductions (2.5% a year on the building for most post-1987 construction) and decline in value of eligible plant and equipment are deductible without any cash leaving your pocket, which is why the taxable loss is often larger than the cash loss. A quantity surveyor's depreciation schedule sets the figures. Note that capital works claimed reduce your cost base for CGT.
What about land tax, body corporate and repairs?
Include them in 'other expenses': council and water rates, land tax, insurance, agent fees, advertising, body corporate administration levies and genuine repairs are all deductible. Improvements and special-purpose levies are capital, not expenses, and belong in the cost base or depreciation instead.
Does this calculator include CGT?
No — it models the annual income tax position only. For the tax on an eventual sale, including the 50% discount and the 2027 changes, use the capital gains tax calculator.
More questions? See the full FAQ or ask us directly.
Property next steps.
Negative gearing changes 2027
The new rules, who's exempt, and what to do before July 2027.
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What you can claim, and the 2027 changes.
Learn more1 July 2027 property checklist
Category, valuation, cost base and decisions before the change.
Learn moreInvestment property and the 2027 rules.
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