Negative Gearing Calculator
Calculate rental property negative gearing tax benefit from income and expenses.
By Konstantin Iakovlev · Updated September 2026 · Source: Australian Taxation Office, Tax rates – Australian residents
Tax Saved (Negative Gearing)
$6,272.00
After-Tax Cash Flow
-$8,328.00
Total ROI
9.4%
Annual Return Breakdown
| Rental Income | $31,200.00 |
| Total Expenses | - $45,800.00 |
| Net Cash Flow | -$14,600.00 |
| Depreciation (non-cash) | - $5,000.00 |
| Net Rental Loss for Tax | $19,600.00 |
| Tax Saved at Your Marginal Rate | + $6,272.00 |
| After-Tax Cash Flow | -$8,328.00 |
| Principal Repaid, Year 1 | + $0.00 |
| Appreciation (est.) | + $22,500.00 |
| Total Annual Return (After Tax) | $14,172.00 |
| ROI on Cash Invested | 9.4% |
Projected Returns
| 1-Year Total Return | $14,172.00 (9.4% ROI) |
| 5-Year Total Return | $77,815.56 (51.9% ROI) |
| 10-Year Total Return | $174,657.28 (116.4% ROI) |
Use the Negative Gearing Calculator above to calculate your results. Enter your values and see instant results — all calculations run in your browser.
Disclaimer: This calculator is for informational purposes only and does not constitute tax, financial, or legal advice. Results are estimates based on the information you provide and current rates. Always consult a qualified tax professional or financial advisor for advice specific to your situation.
How It Works
Australian property investors holding a negatively geared rental can use this tool to estimate the tax benefit that arrangement produces. Feed in your income and expense figures and you can see how the deductible loss on the property pulls down your taxable income for the 2025-2026 financial year.
The calculator works out your net rental loss for tax by subtracting the deductible cash costs you enter (loan interest, council rates and land tax, insurance, maintenance and management) and your depreciation deductions from the rent. It multiplies that loss by the marginal rate you enter, including the 2% Medicare levy (for 2025-2026: 16%, 30%, 37% or 45%, plus 2%), to estimate the tax saved, and adds the saving to the property's cash flow to show what the property costs you after tax. Loan principal is not deductible, so on a principal-and-interest loan the repayments appear separately, as equity rather than expense. The return on your deposit adds an assumed appreciation rate to the after-tax cash flow and leaves out capital gains tax on a future sale.
Treat negative gearing as one element of a wider financial plan rather than a goal pursued for the tax break alone. Projections go astray most often when non-deductible expenses are understated or rental income is overstated, so be conservative on both. For advice tailored to your own circumstances, speak with a financial advisor.
Example: A Negatively Geared Investment Unit
- 1 Input (the calculator's defaults): a $750,000 property bought with a $150,000 deposit on an interest-only loan, rent of $31,200 a year ($600 a week), loan interest of $36,000, council rates and land tax of $3,000, insurance of $1,800, maintenance of $2,500, management of $2,500, depreciation of $5,000 and a 32% marginal rate (30% plus the 2% Medicare levy).
- 2 Cash costs total $45,800, so the property runs $14,600 a year short of the rent. With the $5,000 of depreciation, the net rental loss for tax is $19,600.
- 3 Tax saved: $19,600 × 32% = $6,272 a year. The after-tax cash flow is −$14,600 + $6,272 = −$8,328, about $160 a week out of your pocket.
- 4 The deduction softens the loss but does not remove it; the investment pays off only if the property's value grows. At the assumed 3% a year that is $22,500 in year one, for a total return of $14,172, or 9.4% on the $150,000 deposit, before capital gains tax on a sale.
Source: Australian Taxation Office, Tax rates – Australian residents · Last updated: September 2026
Frequently Asked Questions
What is negative gearing?
Is negative gearing the same as a rental property loss?
When does negative gearing become positive gearing?
You might also need
Compound Interest Calculator — See Your Money Grow Over Time
Calculate compound interest with regular contributions and see how your money grows with daily, monthly, or annual compounding. Free, instant results and charts.
Inflation Calculator
Calculate the impact of inflation on purchasing power over time. See how much past dollars are worth today.
Net Worth Calculator
Calculate your net worth by adding up assets (savings, investments, property) and subtracting liabilities (loans, credit cards).