AU Negative Gearing Calculator 2026/27
Calculate your rental property cash flow with Australian negative gearing rules. Enter your property details, loan information, and other income to see the pre-tax and after-tax cash flow, tax deductions, and depreciation benefits for the 2026/27 financial year.
How negative gearing works in Australia
Negative gearing occurs when the costs of owning a rental property (interest, rates, maintenance, management fees, depreciation) exceed the rental income it generates. The net loss can be deducted against your other income (salary, business income, capital gains), reducing your overall tax bill. For investors on the 30-45% marginal tax brackets, this can create significant tax savings. Depreciation is a non-cash deduction that adds to the tax benefit without impacting cash flow — Division 43 (capital works at 2.5%/yr) and Division 40 (plant & equipment at 2.5-20% diminishing value) can substantially increase your total deductions. Upon sale, the property is subject to Capital Gains Tax (CGT) with the 50% discount if held >12 months, and any prior capital works deductions (Div 43) may be recaptured.
2026/27 rates: Tax-free threshold $18,200, 16% ($18,201-$45,000), 30% ($45,001-$135,000), 37% ($135,001-$190,000), 45% (over $190,000). Depreciation: Div 43 2.5%/yr on construction cost (post-1987), Div 40 simplified estimate. Land tax varies by state (default $1,000/yr).
AU Negative Gearing Calculator 2026/27 — Rental Property Cash Flow
Free Australian negative gearing calculator. Calculate rental property cash flow, tax deductions, depreciation benefits, and after-tax returns.
Expense Breakdown
Cash Flow Summary
Understanding your results
Gross Rental Income is your weekly rent multiplied by the number of weeks the property is tenanted (52 minus vacancy weeks). Cash Expenses include all out-of-pocket costs: loan interest, council rates, insurance, maintenance, strata fees, land tax, and property management fees. Depreciation is a non-cash deduction: Division 43 for structural capital works (2.5% of construction cost per year if built after September 1987) and Division 40 for plant and equipment assets like carpets, blinds, and appliances. Pre-Tax Cash Flow = rental income minus cash expenses — this is your actual bank account impact. After-Tax Cash Flow includes the tax refund from negative gearing, which can turn a cash-negative property into a cashflow-positive investment.
Negative gearing vs positive gearing
If your total expenses exceed rental income, the property is negatively geared — you're making a loss on paper but reducing your tax bill. If your rental income exceeds expenses, the property is positively geared — you're making a profit that's added to your taxable income. Many investors prefer negative gearing in high-growth areas where capital appreciation offsets the holding costs, while others prefer positive gearing for immediate cash flow. Your strategy depends on your tax bracket, investment goals, and risk tolerance.
Depreciation and tax benefits
Division 43 (Capital Works) allows a 2.5% annual deduction on the original construction cost of the building if construction commenced after 15 September 1987. This deduction continues for up to 40 years. Division 40 (Plant & Equipment) covers assets like carpet, blinds, hot water systems, ovens, and air conditioners. These are depreciated at rates between 2.5% and 20% using the diminishing value method. A quantity surveyor's tax depreciation schedule is recommended to maximise your claims. Note that as of 2017, residential property plant and equipment must be owned by the investor (not previous owners) to be claimable.
Capital Gains Tax on sale
When you sell your rental property, Capital Gains Tax (CGT) applies to the profit. If you've held the property for more than 12 months, you're eligible for the 50% CGT discount for individuals. The cost base includes the purchase price, stamp duty, legal fees, and improvement costs. However, any Division 43 capital works deductions you've claimed over the years must be recaptured and added back to the capital gain (Div 43 recapture). Use our AU CGT Calculator to estimate your tax on sale.