Negative Gearing Calculator

Disclaimer: The results from this Negative Gearing Calculator are for illustrative purposes only and should not be considered financial advice. The calculations are based on the information provided and do not account for future tax law changes, interest rate fluctuations, or individual financial circumstances.

What Does The Negative Gearing Calculator Show?

The calculator helps you estimate the financial position of an Australian investment property by comparing its income with the costs of owning and financing it.

Depending on the information you enter, it can help you understand:

• Your estimated rental income
• Your investment-loan interest costs
• Your ongoing property expenses
• Eligible depreciation assumptions
• Whether the property is negatively, neutrally or positively geared
• Your estimated taxable rental profit or loss
• The approximate tax effect of a rental loss
• The estimated cost of holding the property after tax

The result should be treated as a scenario to investigate, rather than a prediction of your final tax refund or investment return.

How Does Negative Gearing Work?

Negative gearing describes the tax and cash-flow position of an income-producing investment.

For a rental property:

• Rental income < deductible property expenses = negatively geared
• Rental income ≈ deductible property expenses = neutrally geared
• Rental income > deductible property expenses = positively geared

Negative gearing can reduce taxable income where the applicable tax rules allow the net rental loss to be used against other income.

But the deduction only offsets part of the economic loss.

How Do I Calculate Negative Gearing?

Negative gearing occurs when the deductible expenses associated with earning rental income exceed the rental income from the property, creating a net rental loss.

A simplified calculation is:

Net rental result = Rental income − deductible rental expenses

Deductible expenses can include eligible loan interest, property management fees, council rates, insurance, repairs, and other allowable rental property expenses.

If the result is negative, you have a net rental loss.

For example:

• Rental income: $30,000
• Deductible loan interest: $27,000
• Other deductible property expenses: $10,000
• Eligible depreciation/capital works deductions: $3,000

Taxable rental result = $30,000 − $27,000 − $10,000 − $3,000

Net rental loss = $10,000

Under rules that allow that loss to be deducted against your other taxable income, a $10,000 rental loss could reduce your taxable income by $10,000.

That does not mean you receive $10,000 back.

If, for illustration, the relevant marginal tax rate were 30%, the approximate income-tax effect of a $10,000 deduction would be $3,000 before considering factors such as levies, offsets and the rest of your tax position.

What Changed With Negative Gearing In 2026?

Australia legislated significant changes to negative gearing in June 2026.

The main negative-gearing changes apply from 1 July 2027.

Property acquired before 7:30 pm AEST on 12 May 2026

Existing qualifying investments are generally grandfathered, so the new restriction does not change their existing negative-gearing treatment simply because the new rules commence.

Eligible new residential builds

Eligible new builds can continue to receive negative-gearing treatment under the new rules.

Established residential property acquired after the Budget-night cut-off

From 1 July 2027, excess deductions relating to affected established residential property generally cannot be deducted against unrelated income, such as salary or wages.

Instead, qualifying excess deductions can generally be applied against relevant residential-property income and certain residential capital gains, with unused amounts capable of being carried forward under the legislation.

This means the purchase date and property type will become important inputs when interpreting a negative-gearing calculation.

The calculator should therefore be treated as an estimate rather than confirmation that a particular rental loss can be deducted from your salary.

Negative Gearing Vs Positive Gearing

The main difference is whether the property’s income covers its deductible expenses.

Neither gearing position tells you by itself whether a property is a good investment.

Property price, loan size, interest rate, rent, vacancies, maintenance, tax treatment and future property performance all affect the overall result.

Is Negative Gearing Actually Worth It?

There is no single tax bracket, income level or amount of negative gearing that automatically makes an investment worthwhile.

A tax deduction can reduce the after-tax cost of a rental loss, but it does not eliminate the loss.

The more useful questions are:

• How much cash will I need to contribute each week or year?
• What happens if interest rates rise?
• Could I continue holding the property during a vacancy or major repair?
• How much of the calculated loss is actually deductible?
• How does the property affect my future borrowing capacity?
• Am I relying on future capital growth to compensate for today’s cash loss?

A mortgage broker can help you understand the lending and borrowing power side of the equation. For advice on deductions, ownership structures and your individual tax position, speak with a registered tax adviser or accountant.

Calculate The Numbers Before You Choose The Loan

Your property’s tax position is only one part of an investment property application.

Two lenders can look at the same investor, rental income and property debt and arrive at different borrowing-power results.

Home Loan Experts can compare how lenders assess your investment income, existing debts, negative gearing benefits and proposed loan to help you understand your financing options.

Please call us on 1300 889 743 or enquire online and one of our commercial mortgage brokers will get back to you with some options.