Negative Gearing Calculator
Use our negative gearing calculator to work out the profit or loss from your investment property as well as your tax refund from negative gearing.
What are your negative gearing benefits?
What is negative gearing?
Investment properties often have higher ongoing costs than the actual rent income will cover. These costs include:
- Property management
- Repairs and maintenance
- Interest on your mortgage
- Council and water rates
- Strata fees
In addition to this you may have such non-cash deductions as the depreciation of the building, an expense that is included in your tax return but is not actually a cost that you physically pay.
The ongoing cost of holding the investment property can be deducted from your taxable income.
Why do people buy negatively geared properties?
Many negatively geared properties are in high demand areas that may potentially achieve higher rates of growth.
Property investors try to achieve more in growth than the cost to hold onto the property. By amassing several properties like this they can do quite well in the long term.
In some cases, the rent income will increase over time and the property will become positively geared. You’ll lose your tax benefits but you won’t have to pay anything to hold onto the property.
How is negative gearing calculated?
We simply deduct the costs for the property from the rent income you receive. This gives us your weekly cashflow. For new properties we can also deduct depreciation.
We can then calculate the effect that this will have on your taxable income and the amount of tax you would get back, depending on your tax rate.
Can you buy an investment property?
Our mortgage brokers are specialists in helping people to buy investment properties. We know which banks can help and who offers competitive discounts for high net worth investors.
Speak to our mortgage brokers by calling 1300 889 743 or fill in our free assessment form to find out if you can qualify for a professional discount.