Rental Property & Negative Gearing Calculator
Estimate your rental property's taxable profit or loss and see the impact on your tax refund for the 2025-26 tax year.
How to Use Rental Property & Negative Gearing Estimator
Follow these steps for an accurate estimate.
1. Gather Info
Collect your income details and a list of all rental-related expenses for the year.
2. Input Details
Enter your personal income, total rental income, and all your property expenses into the form.
3. Analyse Results
The calculator will show your net rental result and estimate the final impact on your tax refund.
How does negative gearing work compared to positive gearing?
Negative gearing is a tax strategy where an investor borrows money to buy an asset (like a rental property), but the income generated by that asset is less than the expenses incurred to own it. This creates a financial loss which can be offset against other income.
| Aspects | Negative Gearing | Positive Gearing |
|---|---|---|
| Tax Benefits | Potential tax deductions reduce taxable income. | Generates taxable income, may lead to higher taxes. |
| Cash Flow | Cash flow deficit, expenses exceed rental income. | Immediate cash flow, income exceeds expenses. |
| Risk and Return | Potential long-term capital gains with property value appreciation. | Immediate income but may have limited capital growth. |
| Investment Strategy | May suit investors seeking tax benefits and capital growth potential. | Benefits investors seeking immediate income and stable cash flow. |
What you need for negative gearing to work
For the strategy to be effective, several factors need to align.
Adequate Personal Income
You need a separate, stable income high enough to absorb the rental loss and benefit from the tax deduction.
Potential for Capital Growth
The primary goal is for the property's value to increase over time, outweighing the initial rental losses.
Long-Term Investment Horizon
Negative gearing is not a get-rich-quick scheme. It relies on holding the asset long enough for capital growth to occur.
Professional Advice
Consulting a financial advisor and tax agent is crucial to ensure the strategy aligns with your personal financial goals and circumstances.
Discover if you Qualify for PAYG Withholding Variation
If you expect a rental loss, you don't have to wait until tax time to get your refund. You can apply for a PAYG Withholding Variation to reduce the tax withheld by your employer each payday, improving your regular cash flow.