Negative Gearing Calculator
See your rental property loss, the tax it offsets, and weekly out-of-pocket holding cost.
Most investors leave thousands on the table by not claiming depreciation. A quantity surveyor's schedule typically costs $600–$900 and pays for itself many times over in the first year.
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The numbers above are a starting point. For decisions involving your full financial picture — tax, debt, super, investments — a qualified Australian financial adviser can give tailored guidance.
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How does negative gearing work in Australia?
Negative gearing is when the costs of owning a rental property (interest, rates, depreciation, repairs and so on) exceed the rental income you receive. The net loss can be deducted from your other taxable income — usually your salary — reducing the tax you pay.
The "tax saving" doesn't make the loss go away. It just softens the blow. If you make a $13,000 rental loss and you're on the 30 per cent marginal rate, the ATO refunds about $4,160 at tax time, so the property really costs you around $8,840 net for the year (around $170 per week out of pocket).
- Interest is the big one. Loan interest is typically the largest expense and the main reason a property is negatively geared. As principal-and-interest loans amortise, the interest portion drops over time and the property may eventually become positively geared.
- Depreciation is "phantom" cash. You claim a deduction without actually spending money. A proper depreciation schedule from a quantity surveyor commonly finds $5,000–$10,000 of deductions in year one for a recent build.
- Travel costs are NOT deductible. Since July 2017, you can't claim travel to inspect a residential rental property.
- You're funding a loss to chase capital growth. Negative gearing only makes sense if you expect the property's value to grow by more than the after-tax loss you wear each year. It's a capital growth play, not an income strategy.
- Loss carries forward if your income is too low. If your salary doesn't cover the rental loss, the unused portion carries forward to future years rather than disappearing.
Frequently asked questions
A rough rule of thumb: gross rent needs to exceed about 6–7 per cent of the property value for the property to be neutrally or positively geared on a standard loan-to-value ratio. Most Australian capital city properties yield 3–4 per cent, which is why so many are negatively geared.
Yes. Negative gearing applies to any income-producing investment held in your own name — shares, managed funds, and property are all eligible. The principle is the same: deductible costs (such as margin loan interest) exceed the income, and the net loss reduces your taxable income.
Not as of May 2026. Negative gearing remains in place for property. However, the 2026 Federal Budget legislated changes to the 50% CGT discount on property from 1 July 2027 — which changes the overall economics of property investment but doesn't remove negative gearing itself.
There are two types. Division 43 (capital works) is 2.5 per cent per year for 40 years on the original construction cost — provided the property was built after 17 July 1985. Division 40 (plant and equipment — appliances, carpets, blinds) was significantly restricted in 2017 for second-hand properties; new properties get the full benefit. A quantity surveyor's report is the standard way to capture the maximum deduction.
Land tax is one of the deductible holding costs you include in the calculator above. It reduces your net rental income for tax purposes alongside interest, rates, insurance and management fees.
Salary sacrificing pre-tax into super lowers your taxable income, which reduces the marginal rate at which the rental loss is offset. Counter-intuitively, this can make negative gearing slightly less tax-efficient. Talk to an accountant about the right balance for your situation.