Negative Gearing Calculator Australia โ FY 2025-26
Calculate whether your investment property is negatively geared and how much tax benefit you receive. Includes cash flow analysis with depreciation, break-even rent calculation, and total investment return with capital growth. Updated for FY 2025-26 tax rates.
Try another scenario
How to Use This Calculator
Gearing Analysis tab
Enter your weekly rent, annual loan interest, and all property expenses (council rates, strata, insurance, property management, repairs). Select your marginal tax rate. The calculator determines whether your property is negatively or positively geared and calculates your tax benefit from any rental loss.
Cash Flow tab
In addition to the Gearing Analysis inputs, enter your monthly loan repayment (principal and interest) and annual depreciation estimate. The calculator shows your real weekly cash flow, the non-cash tax benefit from depreciation, the true annual cost after tax benefits, and the break-even rent needed for neutral gearing.
Investment Return tab
Enter your purchase price, current value, capital growth rate, and years held along with the rental and expense inputs. The calculator shows capital growth, gross and net rental yields, and annualised total return combining yield, growth, and tax benefits.
Share your result
All inputs are encoded in the URL. Click Share to send your exact calculation to your accountant or buyer's agent.
The Formula
Net Rental = Annual Rent − Total Deductions
If Net Rental < 0: property is negatively geared
Tax Benefit:
Tax Benefit = |Net Rental Loss| × Marginal Tax Rate
After-Tax Cost = |Net Rental Loss| − Tax Benefit
Total Deductions:
= Interest + Rates + Strata + Insurance + Management + Repairs + Depreciation
Gross Rental Yield:
= (Annual Rent ÷ Purchase Price) × 100
Net Rental Yield:
= ((Annual Rent − Expenses) ÷ Purchase Price) × 100
Total Return (annualised):
= Net Yield + Tax Benefit Rate + Annual Capital Growth Rate
Worked Example
Investment property: $600K, loan $480K at 6.2%, rent $550/week
Step 1: Annual rental income
Step 2: Annual expenses
Step 3: Gearing result
Verdict: The property is negatively geared with an annual loss of $11,162. At a 37% marginal tax rate, the tax benefit reduces the after-tax holding cost to $7,032 per year ($135/week). This does not include depreciation, which would further increase the tax deduction without any cash outlay.
Negative Gearing Key Rates (FY 2025-26)
Deductible expenses summary
| Expense | Deductibility |
|---|---|
| Loan interest | 100% deductible on investment loan |
| Council rates | Fully deductible |
| Strata / body corporate | Fully deductible |
| Landlord insurance | Fully deductible |
| Property management fees | Fully deductible (typically 5–10% of rent) |
| Repairs and maintenance | Deductible (repairs yes, improvements capitalised) |
| Depreciation — Division 40 (plant) | Deductible (new items only post-9 May 2017 for residential) |
| Depreciation — Division 43 (building) | 2.5% of construction cost/year (if built after 15 Sep 1987) |
Depreciation rules
| Type | Details |
|---|---|
| Division 40 (plant & equipment) | Carpet, blinds, hot water system, appliances. Diminishing value or prime cost method. Second-hand items NOT claimable for residential properties purchased after 9 May 2017. |
| Division 43 (building/structural) | 2.5% of original construction cost per year. Available if construction commenced after 15 September 1987. Not affected by the second-hand restriction. |
| Quantity surveyor report | Required for accurate depreciation schedule. Cost is also tax-deductible. Typical cost: $400–$800. |