Negative Gearing Calculator
Negative Gearing Calculator: Rental Loss and Tax Effect
Enter the rent, the loan and the running costs to see whether a property makes a loss or a profit, the cash it takes to hold it, and the possible tax effect at the marginal tax rate you enter.
Your property
Use your own figures for one year. Leave any optional field blank.
Enter the weekly rent, the loan and your rate to see the rental result. Add your marginal tax rate to see the possible tax effect.
Results are estimates only, based on the figures and tax rate you enter, for one year. Interest is worked out on the full loan amount, as for an interest-only loan. The tax effect is a simple estimate: it isn’t your actual tax outcome, which depends on your full tax position and the rules that apply to the property. Results aren’t a quote, an approval, a loan offer or tax or financial advice, and they don’t consider your objectives, financial situation or needs. Lenders’ advertised rates should be read with their comparison rates. Rates are subject to change and lending criteria apply.
How it works
Reading the result.
Net rental loss or profit
Rent after vacant weeks, less interest, management, other running costs and depreciation. If it’s below zero, the property is negatively geared.
Cash flow before tax
The same sum without depreciation, because depreciation isn’t money you pay out. A negative figure is what you’d top up from your income during the year. Lenders check you can afford that.
The possible tax effect
The loss × the marginal tax rate you enter. It’s a simple estimate under the current rules, assuming the whole loss can be set against your other income. Your actual outcome depends on your full tax position, so your tax agent works it out in your return.
An example
A property rents for $500 a week with two vacant weeks: $25,000 a year. Interest on a $560,000 loan at 6% is $33,600. Management at 7% is $1,750 and other costs are $5,000. Depreciation is $4,000.
Net rental loss: $25,000 − $33,600 − $1,750 − $5,000 − $4,000 = a loss of $19,350. Cash flow before tax: −$15,350, about −$295 a week.
At a marginal tax rate of 32%, the possible tax effect is about $6,192. Cash flow after it: about −$9,158 a year, or −$176 a week. The investor still pays that out of pocket.
An illustration only, using example figures and an example marginal tax rate. Your rate depends on your income. It isn’t tax advice and doesn’t show capital growth or risks.
From 1 July 2027
The ATO says negative gearing for residential property investments is limited to new builds from 1 July 2027, and properties held at 7:30pm AEST on 12 May 2026 are exempt. Whether a property is a new build, and when it was held, affects whether the tax effect applies. Our negative gearing guide covers the changes.
Who does what
A registered tax agent advises on deductions and gearing. A registered financial adviser advises on whether an investment suits you. We compare lenders on our panel and set up the loan. We don’t give tax or investment advice.
Source for the 2027 changes: Australian Taxation Office, “Tax reform – Boosting home ownership – Reforming negative gearing and capital gains tax”, last updated 29 June 2026, read 9 November 2026.
Questions
Common questions, straight answers.
How is negative gearing calculated?
Add up the rent for the year, then subtract the deductible costs: loan interest, property management, rates, strata, insurance, repairs and any depreciation. If the costs are higher, the property has a net rental loss and is negatively geared. Under the current rules, that loss can generally be set against your other income, so the possible tax effect is roughly the loss × your marginal tax rate. Your tax agent works out the actual figure in your return.
What marginal tax rate should I use?
The rate you pay on the last dollar of your taxable income. The ATO publishes the resident tax rates, and you can choose whether to add the Medicare levy. If you’re not sure, ask your tax agent.
Why is the after-tax cost different from the loss?
Depreciation is a deduction but not a cash cost, so it adds to the loss without adding to what you pay. The cash shortfall is what you top up from your income before tax. The after-tax cost takes the possible tax effect off that.
What changes from 1 July 2027?
The ATO says that from 1 July 2027 negative gearing for residential property investments is limited to new builds, and properties held at 7:30pm AEST on 12 May 2026 are exempt from the change. Where the loss can’t be set against your other income, the possible tax effect shown here may not be available. Ask a registered tax agent how it applies to a property you own or plan to buy.
Does the calculator include capital growth?
No. It shows one year of income and costs. It doesn’t include capital growth or capital gains tax, and a loss is still a loss: a tax deduction only reduces part of it.
Planning an investment purchase?
No obligation. No pressure. Just honest answers.
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