Negative Gearing Calculator Australia 2026 - Tax Saving Estimator
Disclaimer: This calculator provides general information only. It is not financial or tax advice. Consult a registered tax agent for advice specific to your situation.
Enter your weekly rent, annual property expenses and marginal tax rate to estimate whether your investment property is negatively geared and what that loss may mean for your tax position. This calculator uses 2025–26 Australian resident tax settings and includes a depreciation field, which is often overlooked because it is a non-cash deduction. It also assumes the standard 2% Medicare levy applies unless you qualify for a reduction or exemption.
Negative Gearing Calculator - Australia 2026
Tax saving estimate • 2025–26 rates • depreciation • projections
Disclaimer: General information only - not financial or tax advice. Consult a registered tax agent for advice specific to your situation.
= $30,160/yr
LVR: 80%
= $36,400/yr interest
Annual Deductible Expenses
= $2,714/yr
Non-cash deduction (quantity surveyor report)
Combined with 2% Medicare levy = 32% effective rate on the loss
Negatively Geared
Net rental loss: $20,954/yr
Estimated tax benefit
$6,705/yr
at 32% combined rate (MTR + Medicare)
Cash Flow Summary
Projections (4% capital growth, 3% rent growth)
| Year | Property Value | Capital Gain | Tax Benefit |
|---|---|---|---|
| Yr 1 | $728,000 | +$28,000 | $6,442 |
| Yr 5 | $851,657 | +$151,657 | $5,307 |
| Yr 10 | $1,036,171 | +$336,171 | $3,685 |
Projections assume constant interest rate and loan balance. Rent growth 3%/yr. Capital growth is not guaranteed.
2025–26 ATO resident tax rates. Medicare levy 2%. Depreciation is a non-cash deduction. Not all costs are immediately deductible - borrowing expenses are claimed over 5 years; capital works over 40 years. This is an estimate, not a tax return.
How the Calculator Works
The tool converts weekly rent into annual rental income, then subtracts deductible costs such as loan interest, council rates, landlord insurance, property management fees, depreciation and other eligible expenses to show either a net rental loss or a taxable rental profit. The ATO describes negative gearing as a situation where deductible rental expenses are greater than rental income, creating a net rental loss that may be claimed against rental and other income.
For 2025–26 Australian resident individuals, the marginal tax bands are: $0–$18,200 nil; $18,201–$45,000 at 16%; $45,001–$135,000 at 30%; $135,001–$190,000 at 37%; and $190,001+ at 45%. Most Australian residents also pay a 2% Medicare levy, although reductions and exemptions can apply.
One important caveat: not every property cost is immediately deductible. The ATO says borrowing expenses are generally claimed over 5 years or the term of the loan, whichever is shorter; capital works are generally claimed over time, commonly at 2.5% a year for 40 years; and principal repayments on the loan are not deductible. That is why this calculator is best used as an estimator, not a substitute for a tax return prepared by a registered tax agent.
The Depreciation Deduction - Most Investors Leave Money on the Table
Depreciation matters because it can reduce your taxable rental income without requiring extra cash outlay in the current year. The ATO recognises claims for both capital works and the decline in value of eligible depreciating assets, and it specifically notes that a quantity surveyor can prepare a report when a rental property is purchased. The ATO also lists quantity surveyor's fees as deductible rental expenses, which is why entering a proper QS depreciation figure often makes the difference between an underwhelming estimate and a more realistic one.
Example - $700K Investment Property, $120K Income
Purchase price: $700,000. Loan: $560,000 at 6.5%. Weekly rent: $580, or $30,160 a year. Interest: $36,400. Council rates: $2,200. Insurance: $1,800. Management at 9%: $2,714. Depreciation: $8,000. Total deductible costs: $51,114. Net rental loss: $20,954.
Using current 2025–26 resident tax settings, a taxpayer on $120,000 is in the 30% marginal bracket. If the full 2% Medicare levy applies and the deduction does not move them into a lower bracket, the combined rate is 32%, producing an estimated annual tax benefit of about $6,705.
Frequently Asked Questions
Yes. Enter the annual depreciation amount from your quantity surveyor’s report. That lets the tool include the non-cash deduction effect and a more realistic estimate of your taxable rental result. The ATO recognises quantity surveyor reports and lists quantity surveyor’s fees as deductible rental expenses, so leaving this field blank can understate the tax benefit.
Next steps
This calculator provides a planning estimate. For personalised tax advice or mortgage pre-approval, speak with a professional.
Disclaimer: General information only. Not financial or tax advice. Consult a registered tax agent.
Also available for other markets
PropertyWiki Team
Editorial Team
Published: April 6, 2026
Updated: April 6, 2026
The PropertyWiki editorial team brings together real estate experts, legal advisors, and market analysts to provide comprehensive property guidance across Australia and internationally.