Negative Gearing Calculator FY2026-27
Enter your taxable income and a rental property's weekly rent, interest and other expenses to see the real net rental result, the tax saving it produces via your marginal rate, and what the property truly costs (or earns) you after tax — per year and per week.
Calculate your negative gearing result
Annual rental income (weekly rent × 52): $26,000
Net rental loss (per year): $10,000
Tax saving (per year): $3,200
After-tax holding cost: $6,800 per year ($131 per week)
Net rental gain (per year): $0
Extra tax (per year): $0
Net after-tax income: $0 per year ($0 per week)
New taxable income: $90,000
This is general information, not financial or tax advice — consider a registered tax agent or financial adviser for guidance specific to your situation.
Estimates for general information — not financial or tax advice. Method, rates and sources are published below.
Tax saving by income and loss size (FY2026-27)
Tax saving and after-tax holding cost for a range of taxable incomes and rental loss sizes, computed from the engine above — not the rent/expense split, just the loss amount and your taxable income.
| Taxable income | $5,000 loss | $10,000 loss | $15,000 loss | |||
|---|---|---|---|---|---|---|
| Tax saved | After-tax cost | Tax saved | After-tax cost | Tax saved | After-tax cost | |
| $80,000 | $1,600 | $3,400 | $3,200 | $6,800 | $4,800 | $10,200 |
| $100,000 | $1,600 | $3,400 | $3,200 | $6,800 | $4,800 | $10,200 |
| $135,000 | $1,600 | $3,400 | $3,200 | $6,800 | $4,800 | $10,200 |
| $190,000 | $1,950 | $3,050 | $3,900 | $6,100 | $5,850 | $9,150 |
How this is calculated
The net rental loss (deductible expenses minus rent) is subtracted from your taxable income, and the tax saving is the difference between the tax on your original taxable income and the tax on that reduced figure — the same marginal-rate composition the income tax calculator uses. If the loss is small enough to stay inside one bracket, the saving is simply the loss multiplied by that bracket's rate plus the 2% Medicare levy. If the loss is large enough to push your taxable income down across a bracket boundary, part of the loss is sheltered at the higher rate and the rest at the lower rate — the two portions are added together, not averaged.
| Taxable income | Marginal rate | Combined with 2% levy |
|---|---|---|
| $0 – $18,200 | 0% | 2% |
| $18,200 – $45,000 | 15% | 17% |
| $45,000 – $135,000 | 30% | 32% |
| $135,000 – $190,000 | 37% | 39% |
| $190,000 and over | 45% | 47% |
A positively geared property (rent above expenses) runs the same formula in reverse: the "loss" is negative, taxable income goes up instead of down, and the tax change is an INCREASE — shown on this page as a negative tax saving, with the after-tax result relabelled "net after-tax income" rather than "holding cost" so it always reads honestly.
Sources
- ATO — new tax cuts for every Australian taxpayer (FY2026-27) — income tax brackets — verified 2026-07-09
- ATO — Rental properties guide 2025 (NAT 1729-06.2025) — deductible expenses — verified 2026-07-10
Assumptions used here follow the same general approach as ASIC's MoneySmart calculators and may not reflect every personal circumstance — see "What this doesn't model" for specifics.
What this doesn't model
- Capital gains tax (CGT) when you eventually sell the property — see the capital gains tax calculator. Money saved via negative gearing today can increase the capital gain (and the CGT payable) later, because some expenses reduce the property's cost base instead of being an annual deduction.
- Depreciation schedules for the building and its fittings (Division 40 plant and equipment, Division 43 capital works) — these can be a large share of "other deductible expenses" for a newer property, but the amount depends on construction cost and date and needs a quantity surveyor's depreciation report to calculate accurately. Add your own estimate to "other deductible expenses" above if you have one.
- State land tax on the property — this calculator treats whatever land tax you pay as part of "other deductible expenses" but doesn't calculate the amount for you; see the land tax calculator.
- Carrying forward a loss to a future year if your other income isn't enough to absorb it in the current year (rare, since most negatively geared owners have salary or other income well above the loss).
- Loan principal repayments, which aren't deductible and don't appear in this calculation at all.
If any of these apply to you, your actual after-tax result will differ from the figures above.
Frequently asked questions
How much tax do I get back from negative gearing?
Only your marginal tax rate on the loss, plus the 2% Medicare levy — never the whole loss. In this page's example, a $10,000 rental loss against $100,000 of taxable income saves $3,200 in tax (30% marginal rate + 2% levy = 32% of the loss). If the loss instead straddled a bracket boundary, part of it would be sheltered at one rate and part at another — see "How this is calculated" below.
Is negative gearing worth it?
Not on the tax alone. The tax saving (at most your marginal rate, up to 47% combined) is always smaller than the loss that produced it, so a negatively geared property costs you real after-tax cash every year — $6,800 a year in the example above, even after the $3,200 tax saving. Negative gearing only pays off if the property's capital growth (or future rent increases) eventually outweighs that ongoing cash cost — it isn't a way to profit from the tax system by itself.
What expenses are deductible?
Loan interest, council rates, land tax, building and landlord insurance, property agent/management fees, repairs and maintenance (but not the cost of initial repairs or capital improvements), body corporate fees, advertising for tenants, and the decline in value of depreciating assets and capital works deductions (see "What this doesn't model" below for depreciation). The ATO's Rental properties guide has the full list and the rules for apportioning expenses when the property isn't rented out all year.
What happens when the property becomes positively geared?
It flips from reducing your tax to increasing it. This is common over time, as rent tends to rise and — on a principal-and-interest loan — the deductible interest portion of your repayments shrinks. For example, the same $100,000 taxable income with $40,000-a-year rent against $26,000 of expenses is a $14,000 rental GAIN, which adds $4,480 to your tax bill — but you still keep $9,520 of it after tax. It's the mirror image of negative gearing: the profit is taxed, not sheltered.