Australia Negative Gearing Calculator
Work out the tax saving from negative gearing: when rental expenses exceed rental income, the loss is deducted from your other taxable income.
What is this tool?
Negative gearing is when the interest and running costs of an investment property exceed its rental income. The loss is deducted from your other taxable income, which lowers the tax you pay. This tool models the income-tax effect only (not CGT or non-tax outcomes).How it works
Enter your rental income, your rental expenses and your other taxable income. The tool shows the tax with and without the rental loss.How the tax saving arises
Negative gearing only changes your income tax. If expenses exceed income, the loss is deducted from your other taxable income, so you pay tax on a smaller amount. The saving equals the loss multiplied by your marginal rate.
| Scenario | Taxable income |
|---|---|
| Without gearing | Other income only |
| With gearing | Other income − rental loss |
What this tool does not cover
It models the income-tax effect only. It does not include capital gains tax on a future sale, land tax, state stamp duty on purchase, or the cash-flow gap (you may still pay out of pocket each year).
| Not covered | Why |
|---|---|
| Capital gains tax | A separate CGT event when the property is sold |
| Stamp duty & land tax | State-based purchase and holding taxes |
| Cash flow | The property may still cost you out of pocket each year |
Changes from 1 July 2027
From 1 July 2027 negative gearing of residential property is limited to new builds. Properties held at 7:30pm AEST on 12 May 2026 are exempt, so existing investors are unaffected; the limitation applies to established dwellings acquired after that time, whose losses can be offset only against residential property income and residential capital gains (excess losses may be carried forward). New builds can still be negatively geared. This tool shows the rules as they stand today and does not model the post-2027 limitation.
How to use
- Enter annual rental income.
- Enter annual rental expenses.
- Enter other taxable income, then Calculate.
Frequently Asked Questions
What counts as a rental expense?
Interest on the loan, repairs, management fees, rates, insurance and depreciation are common deductible expenses. Capital works and principal repayments are not.
Is the saving the full loss?
No. The saving equals the loss multiplied by your marginal tax rate, because only the tax on that income is avoided.
Does it change the asset sale?
Not directly here. The lower cost base from deductions can raise the future capital gain, which is a separate CGT matter.
This tool is for informational purposes only and does not constitute financial advice. Consult a qualified financial professional for advice specific to your situation.
Tips & Advice
This models the income-tax effect only. It does not include CGT on sale, land tax, or cash-flow (the property may still cost you out of pocket).Related Tools
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Sources & References
Last reviewed: September 2026.
- Australian Taxation Office – Rental expenses.
- Treasury – Tax reform.
Limitations
Deducts the net rental loss from taxable income at the 2026-27 resident marginal rates plus the 2% Medicare levy, assuming an established dwelling owned by an Australian resident individual. It does not model depreciation and capital works deductions, borrowing costs spread over five years, land tax or state levies, the tax treatment of a later sale, or the interest-deduction limits for private use and redrawn equity. From 1 July 2027 residential negative gearing is limited to new builds for properties acquired after 7:30pm AEST on 12 May 2026.