Negative gearing calculator · 2026 rules

What could an investment property actually cost you per week?

Rent covers most of it. The tax system may cover part of the gap — depending on what you buy and when, under the new negative gearing rules. Enter your numbers and see the weekly difference, instantly. Built for the 2026–27 tax rates and the rules commencing 1 July 2027.

Your numbers

Assumptions — national-average starting points

Starting points are national averages as at 2026: management ≈7.5% of rent, vacancy allowance 1 week (national vacancy ≈1.3%), typical holding costs for a house, and a typical new-build first-year depreciation figure. Depreciation auto-adjusts when you switch property type. Every figure is editable — your property is not the average.

Under the rules commencing 1 July 2027, this loss can't reduce your salary tax. It's carried forward against future rental profits or capital gain instead — so your weekly holding cost is the full cash gap.
Rent collected (after vacancy)—
Loan repayments—
Property costs—
Cash gap—
Deductible loss (incl. depreciation)—
Tax saved at your marginal rate—
Net cost per year—

Estimates only — general information, not advice. Year-one snapshot based on your inputs and simplified assumptions: 2026–27 resident tax rates plus 2% Medicare levy; interest approximated on the opening loan balance; no allowance for rent growth, rate changes, land tax, LMI or buying costs. The negative gearing treatment shown reflects the Treasury Laws Amendment (Tax Reform No.1) Act 2026 as it applies from 1 July 2027, including the new-build exemption and grandfathering of existing arrangements. Your circumstances, deductions and depreciation will differ — obtain advice from a registered tax agent and independent financial adviser before acting. A PAYG withholding variation is an application lodged with the ATO to reduce the tax withheld from your pay in anticipation of deductions; acceptance, timing and amounts are subject to ATO processing and the accuracy of your estimates, and over-claiming can result in a tax bill — a registered tax agent can advise on and lodge a variation for you. Property values and rents can fall as well as rise.

Methodology

How to calculate negative gearing — the method this tool uses

01Start with the rent, honestly

Weekly rent becomes an annual figure after a vacancy allowance. National vacancy is around 1.3% in 2026 — under one week — so the default allows one week without a tenant.

02Count the cash going out

Loan repayments (interest-only, or principal and interest), property management at the national-average 7.5% of rent, plus rates, insurance and running costs. Rent minus these is your cash gap — what the property costs you before tax does anything.

03Work out the tax view of the year

The deductible loss is rent minus interest (not principal — principal repayments are never deductible), minus cash costs, minus depreciation — a paper deduction that costs nothing but reduces taxable income, and where brand-new builds claim by far the most.

04Apply the 2026 rules

Brand-new builds keep full negative gearing. Established properties contracted before 1 July 2027 are grandfathered. Established properties contracted on or after 1 July 2027 have their losses quarantined — carried forward against future rental profits or capital gains, with no offset against salary. This single distinction is why the weekly figure jumps when you switch property type.

05Calculate the actual tax saving

Where an offset applies, the saving is the real difference in tax payable with and without the loss, computed across the 2026–27 brackets plus the Medicare levy — not a flat marginal-rate shortcut. Joint owners each claim their ownership share against their own income, which is why the split matters and is worth deciding with advice before contracts.

06Net it out — and choose when the benefit arrives

Cash gap plus tax saving is the true year-one cost, shown per week. By default you carry the full gap and receive the benefit as a refund at tax time; a PAYG withholding variation delivers it progressively in each pay instead — same yearly numbers, very different week-to-week cash flow.

New to the rules themselves? Read the plain-English guide: What the 2026 negative gearing changes mean →

Questions

Negative gearing calculator FAQ

What is negative gearing?

Negative gearing is when the costs of holding an investment property (interest, management, rates, insurance, depreciation) exceed the rent it earns, producing a tax loss. Under Australia's long-standing rules, that loss can be deducted against your other income, such as salary, reducing the tax you pay.

How do the 2026 negative gearing changes affect this calculator?

From 1 July 2027, under the Treasury Laws Amendment (Tax Reform No.1) Act 2026, losses on established investment properties purchased from that date can no longer be offset against salary income - they are quarantined against future rental profits or capital gains. Brand-new builds are exempt and keep full negative gearing, and existing arrangements are grandfathered. The calculator's first control applies the correct treatment for each case.

How is the tax saving calculated?

The calculator works out the deductible loss (rent after vacancy, minus interest, cash costs and depreciation - principal repayments are excluded because they are not deductible), then calculates the actual difference in tax payable with and without that loss using the 2026-27 resident tax brackets plus the 2% Medicare levy. For joint owners, each owner's share of the loss is applied against their own income at their own rates.

Why does buying a brand-new build change the result?

Two reasons. New builds are exempt from the post-July-2027 quarantining, so the loss still reduces tax on your salary. And new builds carry much larger depreciation deductions - quantity-surveyor case studies typically show $12,000-$18,000 in the first year, versus $5,000-$10,000 of capital-works-only claims on established properties built after 1987, and little on older homes.

What is a PAYG withholding variation?

A PAYG withholding variation is an application lodged with the ATO asking your employer to withhold less tax from each pay, in anticipation of your property deductions. Instead of carrying the full weekly gap and receiving a refund at tax time, the expected benefit arrives progressively in each pay. Acceptance and amounts depend on the ATO and the accuracy of your estimates - a registered tax agent can advise on and lodge one.

Is this calculator financial or tax advice?

No. It produces year-one estimates from your inputs and simplified national-average assumptions, as general information only. Your actual position depends on your circumstances, lender, deductions and depreciation schedule - obtain advice from a registered tax agent and independent financial adviser before acting.

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