Rental property and negative gearing tax calculator

Salary and other taxable incomeTaxable income from salary and other sources, after deductions. It sets your tax rate.AUD

Rent received in the yearWeekly rent times the weeks it was let, before agent fees.AUD

Loan interestInterest only. The part of each repayment that pays off the loan is not deductible.AUD

Other deductible expensesCouncil rates, land tax, strata, insurance, repairs, agent fees.AUD

Depreciation and capital worksFrom a depreciation schedule, if you have one.AUD

Tax saved by the rental loss

$3,200

No tax to pay on this: allowances, credits or exemptions cover it. How it is calculated is explained below.

Net rental loss-$10,000
Taxable income with the property$90,000
Income tax saved by the rental loss30 %+$3,000
Medicare levy saved2 %+$200
Cash left after expenses and tax-$1,800

An estimate under the rules for the chosen year, for typical cases. It is not tax advice: check the result with the tax office or an adviser before you file.

How it is calculated

Net rental income is the rent you receive minus deductible costs: loan interest, council rates, land tax, strata fees, insurance, repairs, agent fees and depreciation.

If the result is positive, it is added to your other income and taxed at your marginal rate plus the Medicare levy. The calculator shows the income tax, any change in the low income tax offset and the Medicare levy as separate lines.

If your costs are higher than the rent, the loss is deducted from your other income. This is negative gearing. It lowers your tax, but you are still out of pocket for the cash part of the loss. The calculator shows both.

You are an Australian resident and own the property alone. For joint owners, enter your share of rent and expenses.
Other income is your taxable income from salary and similar sources, after deductions, taxed at resident rates with the low income tax offset and the 2 % Medicare levy for a single person.
Deductible expenses include interest on the loan, council rates, land tax, strata fees, insurance, repairs, agent fees and depreciation. Loan repayments of principal are not deductible.
A net rental loss reduces your other income in the same year (negative gearing). A loss bigger than your other income is carried forward to later years.
From 2027-28 a loss on an established home bought after 7.30 pm AEST on 12 May 2026 can only be set against residential property income. This does not affect 2025-26 or 2026-27.
A rental loss is added back for HELP repayments, the Medicare levy surcharge and some offsets. This is not modelled.
Capital gains on a later sale and state land tax amounts are not worked out.

Questions

What is negative gearing?

It is when the costs of owning a rental property, mostly loan interest, are higher than the rent. The loss reduces your other taxable income, such as your salary.

How much tax does negative gearing save?

Roughly the loss times your marginal rate plus the 2 % Medicare levy. On a $10,000 loss at the 30 % rate that is about $3,200.

Is negative gearing changing?

From 2027-28, yes, for established homes bought after 7.30 pm AEST on 12 May 2026. Their losses can then only reduce residential property income and are carried forward. Homes bought before that time and new builds keep the current rules.

Can I claim my loan repayments?

Only the interest. The part of each repayment that reduces the loan balance is not deductible.

Is rental income taxed at a special rate?

No. It is added to your other income and taxed at your normal resident rates.

Sources

Now keep it on track Set the result as a budget in Spendee and see each month how much is left.

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