Negative gearing calculator

A negative gearing calculator estimates the tax effect of a rental property that costs more, in deductible terms, than it earns in a year. Under the current rules, that net rental loss can usually reduce your other taxable income, including salary. From the 2027-28 income year, that wage deduction is limited for many established dwellings bought after Budget night on 12 May 2026.

The Never Lose Interest calculator is built so you can compare those two settings on the same numbers. This explainer shows the arithmetic, the official worked example in the Act, and the facts the calculator cannot decide for you, including whether a dwelling will count as a new build. The current law, including which expenses are deductible, is covered in how negative gearing works. The 2027 policy itself is covered in more depth in the guides to the 2027 negative gearing and CGT changes, grandfathering and new builds versus established property.

This is general information only. It is not personal advice or a tax assessment, and it does not take into account your objectives, financial situation or needs. Whether a particular expense is deductible, and which 2027 category a property falls into, can turn on the facts of the purchase.

What does a negative gearing calculator actually estimate?

It starts with rental income and deductible expenses, including interest on a loan used to earn that rent, and works out a net rental profit or loss. If there is a loss, the calculator then asks where that loss can be used:

• under the current rules, against other taxable income, such as salary
• under the 2027-28 rules, only against income from residential dwellings, including certain capital gains, unless the property is grandfathered or is a new residential dwelling in relation to you

The tax saving, if any, is the change in your income tax and Medicare levy when the allowable loss is applied. It is not the same as the cash shortfall on the property. You still have to fund the interest, rates, insurance and repairs even if a deduction later reduces your tax.

A net rental profit is taxable. Negative gearing is only the loss case.

The calculator should also let you choose the income year, because the 2027 quarantine starts from 2027-28. Until 30 June 2027, the current rules continue to apply, including for established properties bought after Budget night.

How is the tax saving worked out under the current rules?

Take a stylised 2026-27 example for a resident individual with $100,000 of taxable salary, a net rental loss of $15,000, no HELP debt, no Medicare levy surcharge and no offsets other than the usual treatment of the brackets. The example ignores the $1,000 standard deduction that starts in 2026-27, which would slightly reduce taxable labour income in both cases if you use it.

Without the rental loss:

• income tax is $4,020 plus 30% of $55,000, which is $20,520
• the Medicare levy is 2% of $100,000, which is $2,000
• tax and levy together are $22,520

With the $15,000 loss, taxable income is $85,000:

• income tax is $4,020 plus 30% of $40,000, which is $16,020
• the Medicare levy is $1,700
• tax and levy together are $17,720

The tax and levy fall by $4,800, which is 32% of $15,000. That is the marginal rate of 30% plus the 2% Medicare levy. The property still has a $15,000 deductible shortfall. After the tax reduction, the net cash cost of that shortfall is $10,200 in this example, before you count capital growth, selling costs or any later capital gain.

Change the income and the saving changes. A lower income can bring in the low income tax offset or a lower Medicare levy. A higher income can move the loss into a higher tax bracket. A HELP debt is assessed on repayment income, which adds back total net investment losses, so a rental loss that reduces taxable income does not necessarily reduce the compulsory HELP repayment. See the HELP repayment explainer.

This is also why a calculator result is not a reason, on its own, to buy a property. The deduction only offsets tax if there is a genuine deductible loss, and you still have to meet the cash outgoings.

What changes from 2027-28?

The core rule is already law, in the Treasury Laws Amendment (Tax Reform No. 1) Act 2026. From the 2027-28 income year, if deductions for using or holding residential dwellings as residential accommodation exceed your assessable income from those dwellings, the excess is not deductible against other income in that year, unless an exception applies. The excess can be applied against capital gains under the net capital gain rules, and any leftover amount is carried forward to the next year as a residential dwelling deduction.

The exceptions, in broad terms, are:

• properties you already had an ownership interest in at 7.30 pm ACT legal time on 12 May 2026, which are grandfathered
• dwellings that are a "new residential dwelling" in relation to you, which can still be negatively geared

The detailed definition of a new residential dwelling was still being completed in later legislation as at November 2026. Do not treat a calculator's "new build" toggle as a legal conclusion. Flag the setting as assumed, and read the new builds guide for what is settled and what is not.

If you use the 2027-28 setting for a non-grandfathered established dwelling, the $15,000 loss in the example above would not reduce the $100,000 salary. The income tax and Medicare levy would stay at $22,520 in that year, and the $15,000 would be carried forward against later residential property income or capital gains. The cash shortfall is then the full $15,000 in that year, unless you have other residential income to use the loss against.

The Act includes a worked example. Henrietta buys an established residential dwelling in July 2028. In 2028-29 she has $50,000 of rent and $65,000 of deductions. She can deduct $50,000. The leftover $15,000 is carried forward. In 2029-30 she has $52,000 of rent and $70,000 of deductions, so she deducts $52,000 and carries forward $33,000 (the old $15,000 plus a further $18,000). In 2030-31, after reducing her mortgage, she has $72,000 of rent and $20,000 of deductions. She can use the $33,000 carried forward against that year's net rental income.

A useful calculator will show the carried-forward amount, not only the tax payable in year one.

What inputs should I enter, and what should I leave out?

Enter figures you can support:

• rent and other assessable income from the property
• interest on a loan used to earn that income
• other deductible holding costs, such as council rates, insurance, agent's fees, repairs and allowable capital works deductions, if you have worked those out separately
• your other taxable income
• the income year, and whether the property is assumed to be grandfathered, a new build, or an established dwelling bought after the cut-off

Do not expect the calculator to decide whether an expense is deductible. Interest on money borrowed to buy a private home is not deductible. Capital improvements are not claimed in the same way as repairs. Apportionment is required if you use part of the property yourself, or if a loan was used for mixed purposes.

The calculator also does not, on its own:

• work out stamp duty, which is a purchase cost, not a year-one rental deduction (see the stamp duty explainer)
• work out the capital gain when you sell, or apply the old or new CGT rules (see CGT old versus new rules)
• tell you whether the property will produce a cash profit or a capital profit over time
• apply land tax, vacancy levies or state investor surcharges
• replace advice on title, trusts, companies or joint ownership

If you own more than one residential investment property, the 2027 quarantine looks at deductions and income from residential dwellings as a group, not always at one property in isolation. A profit on one dwelling can absorb a loss on another. A calculator that treats each property as a silo can misstate the year-one tax result.

Frequently asked questions

Is the tax saving the same as a cash profit?

No. A $15,000 deductible loss that saves $4,800 in tax still left you $10,200 out of pocket in the current-rules example, before any change in the property's value. Cash flow and tax are related, but they are not the same number.

Can I still claim expenses after 1 July 2027?

Yes, if they are deductible under the ordinary rules. What changes for many established dwellings is where a net loss can be used. It can reduce other residential property income and capital gains, and it can be carried forward. It cannot reduce salary or wages from 2027-28, unless the property is grandfathered or qualifies as a new build.

If I am grandfathered, should I use the current-rules setting after 2027?

For negative gearing, yes, in broad terms, if you had the ownership interest at the 12 May 2026 cut-off. Grandfathering for negative gearing does not freeze the CGT rules. A later sale will still have its post-1 July 2027 gain taxed under the new CGT settings, unless a specific CGT exception applies.

Does a calculator tell me whether I should buy?

No. It only estimates a tax result under the assumptions you type in. Serviceability, rent, vacancies, interest rates, maintenance and your other goals sit outside that estimate. A borrowing power calculator answers a different question again, and is not an approval.

Will a rental loss reduce my HELP repayment?

Not necessarily. HELP repayment income adds back total net investment losses. Model HELP separately with the HELP calculator explainer.

General information warning

This article, and the Never Lose Interest negative gearing calculator, are general information only. They are not personal advice, a tax assessment or a recommendation to buy, hold or sell a property. They do not take into account your objectives, financial situation or needs. The 2027 rules are law, but the detailed definition of a new residential dwelling was still being completed as at November 2026. Consider speaking with a registered tax agent or a licensed financial adviser before you rely on a particular result.

Sources

• Treasury Laws Amendment (Tax Reform No. 1) Act 2026, including the official Henrietta example of carried-forward residential dwelling deductions.
• Australian Taxation Office and Treasury materials on the 2027 negative gearing changes, as cited in the Never Lose Interest 2027 changes guide.
• Australian Taxation Office, Study and training loan repayment income, on net investment losses and repayment income.
• Australian Taxation Office, resident income tax rates and the 2% Medicare levy, as used in the income tax explainer.

Last reviewed: November 2026.