Negative Gearing Calculator
Model the after-tax cashflow of an investment property. Enter the price, rent, loan and your income to see the rental loss, the tax it saves at your marginal rate and what the property really costs you each year. Calculations run in your browser.
Frequently asked questions
What is negative gearing?+
A property is negatively geared when its deductible costs (loan interest, rates, insurance, management, repairs and depreciation) exceed the rent it earns. The net rental loss can be deducted from your other income, such as salary, which reduces the tax you pay.
How much tax does negative gearing save?+
The saving is the rental loss multiplied by your marginal tax rate. A $10,000 loss saves about $3,000 at a 30% marginal rate (plus the Medicare levy) and about $4,500 at 45%. You are still $5,500 to $7,000 out of pocket; negative gearing reduces a loss, it does not remove it.
Does depreciation count towards negative gearing?+
Yes. Depreciation is a non-cash deduction, so it increases the tax loss without costing you money that year. Division 43 capital works deductions are usually the largest part for newer buildings. The depreciation calculator estimates them.
When does a negatively geared property make sense?+
Only when the expected capital growth outweighs the accumulated after-tax losses. The capital growth calculator shows what the property needs to be worth for that to hold.
Is this tax advice?+
No. It is a simplified estimate using current resident tax rates. Your actual position depends on your full tax situation, so confirm with a registered tax agent.
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