Finance & property Australia
Investment Property Calculator
Enter the purchase price, the rent and the costs. The calculator returns weekly cash flow before and after tax, both yields, and the deduction a loss creates — with your marginal rate as an input rather than a guess.
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From a quantity surveyor's schedule, if you have one
Cash flow after tax, per week
—Before tax, per week
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Gross yield
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Net yield
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Tax effect a year
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Working with a different rate? Edit the rates this calculator uses
These are the figures we verified on 2026-10-28. Change them to work with a historic period, or with a new rate that has been announced but which we have not published yet.
Defaults to the $135,001–$190,000 bracket: 37% plus the 2% Medicare levy. Set your own bracket — rates for 2026–27 are 15%, 30%, 37% and 45% before the levy
General information, not advice. General information only, not financial or tax advice. Real outcomes depend on your full income position, the ownership structure, a depreciation schedule, land tax, and how the property is actually used. A registered tax agent and a licensed adviser are the right people to confirm any of this before you buy anything.
How does negative gearing work?
When a property's rent is less than its deductible costs, the shortfall is a loss that reduces your taxable income. At a 39% marginal rate including the Medicare levy, a $10,000 annual loss reduces tax by about $3,900 — so the after-tax cost of holding the property is $6,100, not $10,000.
Negative gearing changes from 1 July 2027
From 1 July 2027 negative gearing for residential property is limited to new builds, and the 50% capital gains tax discount is replaced with indexation and a 30% minimum tax on gains that accrue after that date. The ATO says both measures are now law. Properties held at Budget night, 12 May 2026, are exempt from the negative gearing change, and an investor who buys an established property after Budget night can still deduct a rental loss against rental income but not against wages, carrying the unused loss forward.
This calculator shows the tax effect of a rental loss the way the rules work today. From 1 July 2027 that result will not hold for an established property bought after Budget night.
Negative gearing is a loss, not a strategy
The tax benefit exists only because the property is losing money. Reducing tax by $4,789 costs $12,280 to achieve — nobody comes out ahead on the deduction alone.
The case for holding a negatively geared property rests entirely on capital growth exceeding the accumulated after-tax losses. If the property grows, the strategy works and the deduction softens the carrying cost along the way. If it does not, the deduction has simply made a poor investment slightly less expensive.
That is why the growth assumption matters more than the cash flow figure, and why it belongs in its own calculation rather than being buried in this one.
A higher marginal rate makes the deduction worth more, which is exactly why gearing appeals more to higher earners — and why the same property can be a reasonable proposition for one buyer and a poor one for another.
Gross yield against net yield
Gross yield is rent divided by price. It is the number in every listing and it ignores every cost.
Net yield subtracts the running costs — management, rates, insurance, maintenance — but not the loan, because financing is a decision about you rather than a characteristic of the property. It is the fairer number for comparing two properties.
The gap between them is usually wider than people expect. A 4.5% gross yield often lands nearer 3.2% net once the real costs go in, and strata levies on an apartment can take it lower again.
How this is calculated
Rent in, costs out, then the tax effect of whatever is left over.
gross rent = weekly rent × (52 − vacancy weeks)cash costs = interest + management + rates + insurance + maintenancecash flow before tax = gross rent − cash coststaxable result = cash flow before tax − depreciationtax effect = −taxable result × marginal ratecash flow after tax = cash flow before tax + tax effectgross yield = gross rent ÷ price · net yield = (gross rent − non-loan costs) ÷ price
Depreciation is kept apart from the cash costs on purpose. It reduces taxable income without any money leaving your account that year, which is why a property can be cash-flow negative and still be a smaller loss after tax than it first looks.
Only the interest portion of a loan repayment is deductible. Principal is not a cost at all — it is you buying more of the asset — so this calculator uses interest only, and the figure will differ from what actually leaves your account on a principal-and-interest loan.
A worked example: a $750,000 house
Bought for $750,000 with a $600,000 loan at 6.1%, renting for $680 a week, two weeks vacancy, 7% management, and $7,300 of rates, insurance and maintenance.
- Gross rent — $680 × 50 weeks$34,000
- Interest — $600,000 × 6.1%$36,600
- Management — 7% of rent$2,380
- Rates, insurance, maintenance$7,300
- Cash flow before tax−$12,280
- Tax effect at 39%$4,789
- Cash flow after tax−$7,491
About $144 a week out of pocket after tax, on a gross yield of 4.5%.
Without a depreciation schedule this property loses $12,280 a year before tax. A quantity surveyor's schedule on a newer property can add several thousand dollars of deduction and change that last line materially.
What this does not include
Several real costs sit outside this calculation and all of them matter.
Stamp duty and legal costs at purchase usually run to tens of thousands and are not deductible against income — they go into the cost base for capital gains tax later.
Land tax applies once your landholdings pass the state threshold, and it is charged every year. The land tax calculators in the tax section cover New South Wales and Victoria.
Capital gains tax applies on sale, with a discount for assets held longer than twelve months. And principal repayments, while not a cost, still leave your account every month.
A depreciation schedule from a quantity surveyor typically costs several hundred dollars and is itself deductible. On a property built in the last couple of decades it usually pays for itself in the first year.
What this calculator does not do
- Interest only — principal repayments are excluded because they are not a cost
- Excludes stamp duty, legal fees, land tax and capital gains tax
- Assumes one marginal rate applies across the whole loss
- Depreciation should come from a quantity surveyor's schedule, not an estimate
- Assumes a rental loss can be deducted against other income, which changes from 1 July 2027 for established homes bought after 12 May 2026
Common questions
Is negative gearing changing?
Yes. From 1 July 2027 negative gearing for residential property is limited to new builds. Properties held on Budget night, 12 May 2026, keep their existing treatment.
How do you calculate rental yield?
Gross yield is annual rent divided by the purchase price. Net yield subtracts running costs — management, rates, insurance, maintenance — but not loan interest, since financing is a separate decision.
What is the difference between negative and positive gearing?
Negatively geared means deductible costs exceed the rent, producing a loss that reduces your taxable income. Positively geared means the rent exceeds the costs, so the property produces income you pay tax on.
Does negative gearing make money?
Not on its own. The deduction exists only because the property is losing money, and it returns your marginal rate on that loss — never more than the loss itself. The case depends entirely on capital growth.
Are principal repayments tax deductible?
No. Only the interest is deductible. Principal reduces the debt rather than being a cost, which is why this calculator uses interest only.
Is a depreciation schedule worth getting?
On a property built in the last couple of decades, usually yes. A quantity surveyor's schedule costs several hundred dollars, is itself deductible, and often adds several thousand dollars of deduction in the first year.
Where these numbers come from
- Australian Taxation Office — rental expenses What can be deducted, and what must be spread over several years
- Australian Taxation Office — CGT discount The 50% discount and the 12-month rule (page updated 29 June 2026)
- Australian Taxation Office — tax reform: negative gearing and capital gains tax States that the measures are now law and apply from 1 July 2027 (page updated 29 June 2026)
- Budget 2026–27 — tax reform The negative gearing and capital gains tax measures and their start dates
Rates last verified 2026-10-28 Every figure the Australian Taxation Office sets is re-checked against the source at least once a year, and again whenever a change is announced. Out of date? Tell us and we will fix it.
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