Aussie Calculators

2026–27 tax rates Investment property

Negative Gearing Calculator

A property is negatively geared when its deductible expenses exceed the rent. The loss reduces your other income, so you pay less tax. This calculator shows the loss, your marginal rate, and the tax it actually saves you — plus what the property really costs you after tax.

1 Enter the rent and expenses2 See the tax effect

$
$
$
$

Step 2 · your result

Tax saved by the loss

$0

for the year

Rent received
$0
Total deductions
$0
Net rental result
$0
Your marginal rate
—
Tax + levy before
$0
Tax + levy after
$0
Real cost of the property
$0

Tax rates from Australian Taxation Office, checked 11 October 2026. General estimate — not tax advice. Property deductions have detailed rules; confirm yours with the ATO or a registered tax agent.

What you can and cannot deduct

Usually deductible

  • Interest on the investment loan
  • Council rates and water rates
  • Land tax
  • Insurance (building and landlord)
  • Repairs and maintenance
  • Property management fees
  • Body corporate / strata fees
  • Depreciation on plant and equipment
  • Capital works deductions (Division 43)

Not deductible

  • Repayment of loan principal — only the interest
  • Your own labour and travel to do your own repairs
  • Capital improvements (claimed under capital works instead)
  • Stamp duty on purchase (added to cost base)
  • Expenses on a property you also live in, for your own use period

The number people miss: negative gearing usually does not make a property cash-flow positive. The tax saving is a fraction of the loss — you can still be out of pocket thousands of dollars a year. This calculator shows the after-tax cost so you can see the real number.

Frequently asked questions

What is negative gearing?

When the deductible expenses of an investment property exceed the rent it earns, the property is negatively geared. The net loss reduces your other assessable income, so you pay less tax — the tax you save is the loss multiplied by your marginal rate.

How much tax does negative gearing actually save?

The saving is your marginal rate times the loss, not a fixed percentage. At a 30% marginal rate a $10,000 loss saves about $3,000. At 45% it saves more. Below the tax-free threshold it saves nothing, because you were not paying tax on that income anyway.

Does the loss include the whole mortgage repayment?

No. Only the interest on an investment loan is deductible — the principal repayment is not. Council rates, insurance, repairs, property management fees, depreciation and body corporate fees are typically deductible. Capital works and depreciation follow their own rules.

What is positive gearing?

When rent exceeds the deductible expenses, the property makes a taxable profit and you pay tax on it. The calculator handles both — enter figures that produce a profit and it will show the extra tax rather than a saving.

Does the loss reduce my Medicare levy too?

Yes, because the Medicare levy is calculated on taxable income. A rental loss lowers taxable income, so it can reduce the 2% levy as well as income tax. This calculator includes that effect.

I already have a deduction, so why does my tax not drop by the whole loss?

Because the saving is capped at the tax you would otherwise have paid on that income. A loss cannot create a refund of more than the tax attributable to the income it offsets. Losses above the tax-free threshold band are also refunded at the lowest rate that applies.

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