Negative Gearing Calculator Australia

Negative gearing means your investment property's total costs (including loan interest) exceed your rental income. The net loss is deductible against your other income, reducing your tax bill, and until the 2027-28 income year it can be claimed in the same year the loss occurs. From 2027-28, a loss on an established dwelling contracted after 7:30pm on 12 May 2026 is quarantined: it offsets residential rental income or a residential capital gain only, never wages. Enter your contract date above and the result card tells you which applies to you.

It depends on your tax rate, your capital growth expectations and — from the 2027-28 income year — whether the property is quarantined. At a 32% marginal rate, every $10,000 in losses saves you $3,200 in tax while the loss is deductible against your wages, leaving you $6,800 out of pocket. If the loss is quarantined, the saving is nil in any year you have no residential rental income to absorb it, and the whole $10,000 is out of pocket until you do. Either way the strategy only makes financial sense if capital growth outweighs the cumulative cash losses.

Yes — loan interest, property management fees, council rates, water rates, insurance, maintenance, repairs, strata fees and depreciation are all generally deductible. Capital improvements (not repairs) are usually depreciated over time rather than immediately deductible. Always confirm with your accountant.

The pre-tax break-even is the weekly rent at which rental income covers all your cash expenses. The after-tax break-even is lower only when you claim non-cash deductions, which in practice means depreciation. A cash shortfall is deductible, but the deduction hands back only your marginal rate on it and you fund the remainder, so it does not change the rent you need to break even — with depreciation at $0 the two figures are the same. Depreciation is different because you never pay it: each dollar claimed lowers the annual break-even by your marginal rate divided by one minus your marginal rate, so $10,000 of depreciation at a 32% rate lowers it by about $4,706 a year, or roughly $90 a week.

Depreciation is a non-cash tax deduction for the wear and tear on the property and its fittings. You don't pay it out of pocket, but it increases your deductible loss and therefore your tax saving — a $10,000 claim at 32% is worth $3,200 with no cash outlay, while the loss is deductible against your other income. It is also the only deduction that lowers your after-tax break-even rent, for exactly that reason. If the loss is quarantined, depreciation adds to the quarantined pool rather than producing a refund that year.