Negative Gearing Calculator Australia
See exactly how much negative gearing on your investment property saves you at tax time. Uses the current ATO FY 2026-27 tax brackets.
Your details
Your salary or other taxable income, before tax
Rental income
Annual expenses
Typically $3,000 – $10,000 per year for a new/newer property
Your result
Negatively Geared
$6,602annual loss
Estimated tax saving
$2,113
That's roughly how much negative gearing saves you in tax this financial year.
Heads-up: claimed Div 43 capital works deductions reduce your CGT cost base when you sell, which increases the capital gain you'll be taxed on (ATO ITAA 1997 s.110-45). Plan accordingly.
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2026 Budget update:From 1 July 2027 the Government has proposed 'quarantining' negative gearing on established rental properties bought on or after 7:30pm 12 May 2026 - losses would only offset rental income, not your salary. Properties you owned before then are grandfathered and keep today's rules, which this calculator uses. Read the full 2026 property tax changes guide.
How negative gearing works in Australia
Negative gearing happens when the costs of owning an investment property (loan interest, council rates, property management fees, insurance, repairs, and depreciation) exceed the rental income you receive.
Under current Australian Taxation Office (ATO) rules, that net loss can be deducted from your other taxable income, including your salary. This reduces your overall taxable income, which means you pay less tax.
The dollar benefit depends on your marginal tax rate: the higher your income, the larger the tax saving from negative gearing. The calculator above uses the FY 2026-27 ATO tax brackets (with Stage 3 cuts applied) to give you an accurate estimate.
Worked example
An investor earning $135,000 with a $10,000 net rental loss drops to $125,000 taxable income. Both figures sit in the 30% bracket, so that loss saves $3,200 in tax for the year (30% bracket + the 2% Medicare levy). A higher earner already in the 37% bracket (say $160,000) gets a bigger benefit - $10,000 off the top saves $3,900 including the levy.
What counts as a deductible expense?
These are the main costs the ATO lets you claim against rental income:
- Loan interest (not principal repayments)
- Council rates and water rates
- Property management and letting fees
- Building insurance and landlord insurance
- Repairs and maintenance
- Depreciation on the building (Division 43) and plant & equipment (Division 40)
- Strata/body corporate fees
- Advertising for tenants
- Cleaning, gardening, and pest control
- Land tax
- Legal and accounting fees
FY 2026-27 ATO tax brackets
| Taxable income | Tax on this income |
|---|---|
| $0 - $18,200 | Nil |
| $18,201 - $45,000 | 15c for each $1 over $18,200 |
| $45,001 - $135,000 | $4,020 + 30c for each $1 over $45,000 |
| $135,001 - $190,000 | $31,020 + 37c for each $1 over $135,000 |
| $190,001+ | $51,370 + 45c for each $1 over $190,000 |
Plus Medicare Levy (2%) and Low Income Tax Offset where applicable. Source: ATO - Tax rates for Australian residents →
Common questions
Is negative gearing still allowed in Australia?
Yes. Negative gearing remains available for Australian property investors under current ATO rules for FY 2026-27.
Does negative gearing make sense for me?
It depends on your marginal tax rate and your cashflow position. The higher your income, the larger the tax saving. But you are still losing money on the property; the tax saving only reduces the loss, it doesn't eliminate it.
What's the difference between negative, neutral, and positive gearing?
Negative gearing = expenses exceed rental income (taxable loss). Neutral gearing = income equals expenses. Positive gearing = rental income exceeds expenses (taxable profit).
Can I negatively gear more than one property?
Yes. You can deduct losses across your entire portfolio. Vestly aggregates these automatically across every property you add.
How much tax do you actually get back from negative gearing?
You get back your net rental loss multiplied by your marginal tax rate, not the full loss. A $10,000 loss saves about $3,200 in the 30% bracket, $3,900 in the 37% bracket, and $4,700 in the 45% bracket (including the 2% Medicare levy). The refund only offsets part of the loss, so a negatively geared property still costs you money out of pocket overall.
Does negative gearing include depreciation?
Yes. Depreciation on the building (Division 43) and on plant and equipment (Division 40) is a deductible expense that can push a property from cashflow-neutral into a taxable loss without any extra cash leaving your account. It is often the deduction that makes a property negatively geared on paper while still close to neutral on real cashflow.
See this tax saving update live, all year
A spreadsheet can't re-estimate your tax saving every time you log an expense. Vestly does it automatically across every property you own, and generates an ATO-ready tax pack for your accountant at EOFY. Free to track your portfolio, no subscription.
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