Investment Property Calculator Australia

Gearing and cash flow are different answers

A property is negatively geared when its deductible rental expenses exceed its assessable rental income. It can still require more cash than the taxable loss suggests because loan principal is a cash payment but not an income-tax deduction. Depreciation and capital works can create the opposite gap: they may reduce taxable rental income without being a current cash payment.

This calculator therefore keeps three numbers separate: the taxable rental result, cash flow before tax and cash flow after the estimated tax impact. A label such as ‘negatively geared’ does not by itself tell you whether the investment is affordable or attractive.

What changes from 1 July 2027

For 2026–27, the calculator allows an eligible residential rental loss to reduce the entered other taxable income. From 2027–28, Schedule 2 of the Treasury Laws Amendment (Tax Reform No. 1) Act 2026 generally quarantines excess residential dwelling deductions instead of allowing them to offset wages.

The enacted exceptions include an ownership interest last acquired before 7:30 pm ACT legal time on 12 May 2026 and a new residential dwelling in relation to the taxpayer. For an established property acquired after the cutoff, the model carries the quarantined amount forward and applies it against later positive residential rental income. It does not apply that amount to a residential capital gain because this page does not model a sale.

Interest follows the use of the borrowed money

The ATO treatment depends on what borrowed funds were used for, not simply which property secures the loan. Interest on money used privately is not converted into a rental deduction by offering an investment property as security. Redraws, refinances, mixed-purpose loans and private use can require apportionment.

The model treats the entered loan as wholly attributable to earning rent and separates interest from principal each month. If that does not describe the loan, enter only the investment portion or use a tax agent’s apportionment before relying on the result.

Use your records for depreciation and buying costs

Capital works and decline-in-value deductions depend on construction history, asset type, acquisition date, prior use and other facts. The calculator accepts annual claims from your records or quantity-surveyor schedule; it does not invent a depreciation deduction from the property price.

Transfer duty, conveyancing, inspections, buyers-agent fees and loan costs also vary by state and circumstance. Enter the buying costs that apply to your scenario. They affect initial cash invested and the scenario return, but the page does not treat them automatically as annual rental deductions.

A projection is a stress test, not a forecast

Rent growth, expense growth, property growth, interest rates and taxable income are editable assumptions. The projection holds the entered interest rate and annual non-cash deductions constant, uses the legislated resident tax rates currently scheduled from 2027–28 and does not predict refinancing, vacancies, major works or market prices.

Run a conservative case as well as an optimistic one. A useful property decision should survive lower rent, more vacancy, higher costs and zero price growth—not depend on one smooth ten-year line.