Negative Gearing Calculator

Your purchase

Purchase price
$
Deposit amount
$
Would you like to calculate depreciation?
Interest rate (See special offers)
%
Property type
Growth rate of property
%
Number of borrowers

Income details

Gross income p.a. ?
$
Gross income p.a. (borrower 2) ?
$
Rental income
$
Increase in rent p.a.
%

Expenses per annum

We've estimated the expenses for your investment property.
Please change these figures as you see fit.

Repayments
Council rates
$
Strata
$
Insurance ?
$
Repairs and maintenance
$
Water rates
$
Property management fees Property mgmt. fees ?
%
Inflation
%

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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.


How does negative gearing work?

Investment properties have high once-off and ongoing costs that are usually higher than the actual rent income will cover.

One-off costs

  • Your initial deposit.
  • Mortgage set-up fees including Lenders Mortgage Insurance (LMI) (if borrowing over 80% of the property value).
  • Stamp duty.
  • Solicitors, conveyancing and other legal fees.
  • Connecting electricity, water and gas.

Ongoing costs

  • Monthly property management fees.
  • Repairs and maintenance costs that can vary but will invariably increase over time.
  • Monthly mortgage repayments plus annual interest payments.
  • Quarterly council and water rates.
  • Quarterly body corporate fees.
  • Annual land tax.
  • Annual mortgage account-keeping fees.
  • Annual building insurance.
  • Annual landlords insurance.

In addition to this, you may have such non-cash deductions as the depreciation of the building, an expense that’s included in your tax return but isn’t actually a cost that you physically pay.

The ongoing cost of holding the investment property can be deducted from your taxable income.

Falling into a lower tax bracket is a great win but it’s important to be aware these wins won’t pay off until later down the track.

In the meantime, have a read of this guide about managing cash flow when negative gearing.


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.

Check out this page about negative gearing versus positive gearing to get an idea of the benefits and drawbacks of each strategy.

Before making a decision, it’s best you seek independent advice from a qualified accountant so you fully understand your tax obligations.


How is negative gearing calculated?

We simply deduct the costs for the property or cash operating expenses, from the rental 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 investment loan specialists.

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.

  • D Bryan

    Hi, I’m planning to purchase a couple of investment properties in high growth areas and reap the benefits of negative gearing. I want to purchase it jointly with my business partner so I want to make sure whether it is acceptable to the banks.

  • Hey D Bryan,

    Yes, banks can accept a joint investment purchase with a business partner. From a lending perspective, co-ownership investment loans are considered the same as any other standard investment loan so you and your co-borrower won’t have to meet exceptionally difficult requirements to qualify. You can learn more here:
    https://www.homeloanexperts.com.au/investment-loans/co-ownership-investment-loan/

  • DustinR

    I don’t have any properties under my belt and I’m just starting my property investment journey. I’ve come to understand quite a few things like this negative gearing but I still have a long way to go. Do you have a sitemap or something that I can use to access a whole bunch of investment loan topics to learn about them?

  • Hello DustinR,

    Finding accurate and up to date information is a huge challenge for property investors and it may be even more so if you’re just starting out. To help you, we’ve put together a comprehensive list of resources that you can use to educate yourself on investment loans and how to buy an investment property. Check out our property investor centre for different mortgage calculators and property investment guides:
    https://www.homeloanexperts.com.au/property-investor-centre/

  • Fitzgerald

    Pretty good calculator you guys got here. I need finance to buy a $695k investment property but I can’t prove my income through the usual docs right now. Can you help?

  • Hi Fitzgerald,

    Thanks for your comment. We can help with your loan application but we will need your full info and details to properly understand your situation and find out what you can qualify for and which lender would be right for you. Please call us on 1300 889 743 to speak with an expert investment mortgage broker or simply enquire online:
    https://www.homeloanexperts.com.au/free-quote/

  • bobby b

    Hi, can we get the first home owners grant when buying an investment property?

  • First home buyers who are buy a residential property only qualify for the First Home Owners Grant (FHOG). However, you may qualify for the FHOG even if it’s an investment property as long as you too will be living in it.

  • Drake

    I found a great property in a remote location, probably a no category location, and I know that this is considered risky by the banks. Is there any way that I can borrow still?

  • Hi Drake,

    Some of our lenders do not have any postcode restrictions so they can consider no category locations in Australia. Please call us on 1300 889 743 if you’d like to speak about this with one of our experts.