Negative Gearing Calculator

General information only

This page and calculator provide general information based on 2025–26 Australian resident tax rates, not tax or financial advice. Confirm your position with a registered tax agent and a licensed financial adviser.

What is negative gearing?

A property is negatively geared when the costs of owning it — loan interest, rates, insurance, management fees, repairs and depreciation — add up to more than the rent it earns. That annual loss can be deducted against your other income (like your salary), reducing your tax. In Australia this is legal and common, but the key point is often missed: you're still losing money each year. Negative gearing softens the loss through a tax refund; it doesn't make the property free. The strategy only works if the property's capital growth over time outweighs the cumulative after-tax losses.

How the calculator works

It does three things:

1. Works out your rental result — gross rent minus all deductible expenses (including non-cash depreciation). If that's negative, you're negatively geared.
2. Estimates your tax saving — it calculates your tax with and without the rental loss, using the 2025–26 resident tax brackets plus the 2% Medicare levy, so the saving reflects your actual marginal rate (and correctly handles a loss that crosses tax brackets).
3. Shows the real after-tax cost — the out-of-pocket cash shortfall, reduced by the tax saving. This is the number that matters: what the property actually costs you to hold each year and per week.

Why depreciation matters here

Depreciation (the building's capital works and the fixtures' decline in value) is a non-cash deduction — you claim it without spending a dollar that year. It increases your tax saving without increasing your cash shortfall, which is why it's one of the most valuable parts of a negatively geared position. If you don't know your figure, estimate it with our depreciation calculator, then get a quantity surveyor's schedule for the real numbers.

Keep the records that back the deduction

Negative gearing only delivers if you actually claim every dollar you're entitled to — and can prove it. That means clean records of rent received, every expense, your loan interest (and any redraws), and your depreciation schedule. ledger.rent keeps all of it in one place per property and exports an accountant-ready summary at tax time, so nothing is missed and your claim stands up.

Related reading: negative gearing explained, claim loan interest, and rental property tax deductions.