Negative Gearing Calculator Australia 2026-27
Estimate the taxable rental loss or profit on an Australian residential rental, then see how that result changes resident income tax and the Medicare levy on your other income. The same worksheet also reports gross and net yield, annual cash flow, and the after-tax weekly cost. Deductibility follows published ATO rental-expense rules. Tax bands are the official 2026-27 and 2025-26resident tables — the rate files are not copied here.
How the tax result is worked out
Rent collected is weekly rent times 52, minus the vacancy weeks you enter. Deductible amounts in this model are interest (loan × rate for one year), council rates, strata or body corporate fees, insurance, management fees, repairs, and the depreciation / capital-works figure you type in. The ATO’s common-expense list treats those ownership and use costs as immediate deductions where you actually incur them and the property is held to produce rent. Decline in value and capital works are a separate, multi-year category — you supply this year’s claim; the page does not invent a schedule.
If deductions exceed rent collected, the difference is a taxable rental loss. That loss is taken off your other taxable income. The page then re-uses the income tax calculatorto compare income tax plus the Medicare levy with and without the property. A smaller bill is shown as a tax refund; a larger bill is extra tax. Taxable income is not allowed to go below zero, and unused tax losses are not carried forward.
Cash flow is not the same as the taxable result
Annual cash flow is rent collected minus operating costs and interest. Depreciation is left out because it is not a cash payment. That is why a property can be negatively geared for tax while the cash shortfall is a different number. After-tax weekly cost is the cash shortfall reduced by any tax saving (or increased by extra tax), divided by 52. Interest is an interest-only illustration. Principal you repay is not deductible and is not subtracted here — use the mortgage repayment calculatorif you need a principal-and-interest payment.
What this page does not do
- It does not recommend a property, a loan, or an interest rate.
- It does not split joint ownership or trust and company owners.
- It does not apply HELP, tax offsets, or the Medicare levy surcharge.
- It does not test whether vacant weeks were “genuinely available for rent”.
- It does not estimate capital gains when you sell — see the capital gains tax calculator.
Frequently Asked Questions
What does negative gearing mean on this page?
Here it means the property’s deductible costs for the year are higher than the rent you collected, so the rental activity produces a taxable loss. That loss is subtracted from your other taxable income before resident income tax and the Medicare levy are worked out. The ATO does not use the marketing phrase “negative gearing”; it simply treats a net rental loss as a reduction in taxable income for that year, subject to the usual deduction rules.
Which rental expenses can be deducted?
The ATO lets you claim costs you actually incur to produce assessable rental income while the property is rented or genuinely available for rent on commercial terms. Immediate deductions commonly include interest on a loan used to buy the rental property, council rates, body corporate fees, insurance, agent fees, and repairs and maintenance. Decline in value of plant and capital works are claimed over several years. You cannot deduct tenant-paid costs, most travel to inspect a residential rental, private use, or the cost of buying or selling the property.
Why is depreciation in the tax figure but not in cash flow?
Decline in value and capital works reduce taxable income, but they are not money leaving your account this year. Cash flow on this page is rent collected minus operating costs and interest. The taxable rental result also subtracts the depreciation amount you enter.
How is the tax refund or extra tax estimated?
The calculator works out resident income tax and the Medicare levy twice, using the same functions as the income tax calculator: once on your other taxable income, and once on that income plus the taxable rental profit or loss (floored at $0). The difference is the refund (smaller tax bill) or extra tax. HELP, offsets, the Medicare levy surcharge and joint ownership are not modelled.
Do vacant weeks stop deductions?
Vacant weeks reduce the rent collected. The ATO still allows deductions for periods when the property is not tenanted, provided it is genuinely available for rent on commercial terms — broadly advertised, at a comparable rent, and with enquiries followed up. This tool does not test those facts; it only reduces income by the vacancy weeks you enter.
Is this tax or investment advice?
No. This page is general information about published ATO rental-income and deduction rules and the resident tax tables. It is not tax advice, not a product recommendation, and not personal financial advice. In line with ASIC’s general-information approach, we do not recommend buying, holding or selling a property or a loan. Confirm figures with the ATO or a registered tax agent before you lodge.