Disclaimer: This calculator provides estimates only and should not be considered financial or tax advice. Always consult with a qualified tax professional or accountant before making investment decisions. This tool does not constitute advice from the Australian Taxation Office.
Negative gearing calculator inputs and results
Property & Loan
Enter loan amount or LVR. Both fields update each other.
Annual Expenses
Leave blank for any items that don't apply.
Apartments / Units / Townhouses only. Leave blank if not applicable.
Depreciation
Non-cash deductions reduce taxable income but involve no cash outlay. Confirm figures with a quantity surveyor.
Non-cash deduction. Reduces taxable income but costs no cash.
Non-cash deduction. Reduces taxable income but costs no cash.
Your Tax Details
Enter property, loan and rental details above
Results update live as you type. At minimum, enter a property value, loan amount, interest rate and weekly rent.
What is negative gearing?
A rental property is negatively geared when the costs of owning it, including loan interest, are more than the rent it earns. This produces a net rental loss.
Under current rules, you can deduct that net rental loss against your other income, such as salary or wages, which reduces your taxable income and the tax you pay. This calculator estimates your net rental position and the tax effect. It is a model and general information, not tax advice.
Negative gearing is changing. From 1 July 2027, it will be limited to newly built homes. Losses on established residential properties bought after 7:30pm AEST on 12 May 2026 will only be deductible against residential property income or capital gains, not against salary. Properties held before that date are not affected. This calculator uses the current rules.
How to use this calculator
Enter your rental income
Use the annual rent you expect to receive.
Add your expenses
Include loan interest, management fees, rates, insurance and maintenance.
Enter your taxable income
This sets the marginal tax rate used for the tax effect.
Read the result
The calculator shows your net rental position and the estimated tax effect.
How this calculator works
The calculator subtracts your deductible rental expenses from your rental income to find your net rental position. If expenses are higher than income, the result is a net rental loss. It then estimates the tax effect of that loss at your marginal tax rate.
Assumptions used
Only the interest portion of loan repayments is deductible, not the principal. The tax effect is estimated using current income tax rates and the Medicare levy, applied to the change in your taxable income. Depreciation is a non-cash deduction and is estimated separately if included. The estimate uses current rules for the 2025-26 income year. It does not apply the negative gearing changes that take effect from 1 July 2027, and it is not tax advice.
Worked example
An investor receives $26,000 a year in rent. Their deductible expenses are $38,000, made up mostly of loan interest, plus management fees, council rates, insurance and maintenance.
The net rental loss is $12,000. If the investor's marginal tax rate is 37 percent plus the 2 percent Medicare levy, the loss reduces their tax by about $4,680. The after-tax cost of holding the property that year is the $12,000 loss less the $4,680 tax saving, which is about $7,320.
The tax saving depends on your marginal tax rate. A higher marginal rate produces a larger saving from the same loss, but the property still costs you money to hold each year.
What changes your negative gearing position
Several things change the size of the annual loss and the tax saving it produces. The main ones are:
Rental income
The rent you receive. Higher rent reduces the loss, and if it exceeds expenses the property is positively geared and the net income is taxed.
Loan interest
Interest on the loan used to buy the property is deductible. Only the interest portion is deductible, not the principal you repay.
Other rental expenses
Deductible expenses include property management fees, council rates, water charges, insurance, and repairs and maintenance.
Depreciation
Depreciation on the building and on fixtures can be claimed as a non-cash deduction, which increases the loss without a cash outlay. See the Depreciation calculator.
Your marginal tax rate
The loss reduces your taxable income, so the tax saving depends on your marginal rate. A higher marginal rate produces a larger saving from the same loss.
Changes from 1 July 2027
From 1 July 2027, negative gearing is limited to newly built homes. For established residential properties bought after 7:30pm AEST on 12 May 2026, losses can only be deducted against residential property income or gains, not salary. Excess losses can be carried forward.
Rates and assumptions used
| Item | Value used | Source |
|---|---|---|
| Net rental loss | Deductible rental expenses less rental income | ATO |
| Deductible loan cost | Interest portion of repayments only, not principal | ATO |
| Current treatment, 2025-26 | Net rental loss deductible against other income | ATO |
| Change from 1 July 2027 | Limited to new builds; losses on established property bought after 12 May 2026 quarantined to property income and gains | ATO, tax reform |
Figures checked against the sources above on 10 August 2026.
Frequently asked questions
A rental property is negatively geared when its deductible costs, including loan interest, are more than the rent it earns, which produces a net rental loss. Under current rules that loss can reduce your other taxable income, such as salary.
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Depreciation Calculator
Division 43 and Division 40 estimates
How the 50% CGT Discount Works
Guide
Sources
- •ATO, how to claim rental expenses
- •ATO, tax reform, reforming negative gearing and capital gains tax
- •Australian Government, Budget 2026-27, tax reform
Content reviewed and figures checked against the sources above on 10 August 2026.