Using a Negative Gearing Calculator in Australia: A Step-by-Step Guide
Estimates the tax saving and real weekly cost of a negatively geared property. This guide walks through what each input means, the formula behind the answer and a worked example using typical Australian figures. You can follow along in the free Negative Gearing Calculator.
Why it matters
Buying property in Australia involves a deposit, stamp duty, lender requirements such as the APRA serviceability buffer, and ongoing repayments that move with interest rates. Investors also weigh rental yield, negative gearing and capital gains tax.
What you need to enter
The calculator asks for 3 inputs. The table shows each one with the example value used later in this guide.
| Input | Example value |
|---|---|
| Annual rental income ($) | 30000 |
| Annual expenses incl. interest ($) | 42000 |
| Marginal rate incl. Medicare (%) | 39 |
The formula
Loss = rent − expenses. Tax saving = loss × marginal rate. After-tax cost = loss − tax saving.
Worked example
Entering the example values above gives these results:
| Result | Value |
|---|---|
| Net rental loss | $12,000.00 |
| Tax saving (if loss) | $4,680.00 |
| After-tax cost per week | $140.77 |
The headline figure is $12,000.00 (net rental loss). Change any input in the calculator and every result updates instantly, so you can test different scenarios side by side.
How the net rental loss changes with annual rental income
The table below keeps every other input at the example value and moves only “Annual rental income ($)” up and down by 10% and 20%. It shows how sensitive the net rental loss is to that one figure.
| Annual rental income ($) | Net rental loss |
|---|---|
| 24,000 | $18,000.00 |
| 27,000 | $15,000.00 |
| 30,000 | $12,000.00 |
| 33,000 | $9,000.00 |
| 36,000 | $6,000.00 |
At 24,000 the result is $18,000.00; at 36,000 it is $6,000.00. If a small change in this input moves the answer a lot, it is worth double-checking that figure before you rely on the result.
A practical tip
A tax saving never fully covers a loss. Negative gearing only pays off if capital growth exceeds the after-tax cost.
Keep going
Before relying on the number, read Common Negative Gearing Mistakes (and a Better Way). You might also find these guides useful:
- Capital Gains Tax Calculator Explained for Australians
- How the Home Loan Refinance Calculator Works (With a Worked Example)
- Rent vs Buy Calculator: Formula, Example and What the Result Means
Frequently asked questions
- Do these calculators match what my bank will say?
- Lenders use their own models, expense benchmarks and policies. Use these results to prepare, then speak to a lender or broker.
- Are stamp duty rates current?
- Duty thresholds are indexed or changed regularly. Always confirm with your state revenue office before relying on a figure.
- Is this financial advice?
- No. The calculators give general estimates only and don’t consider your objectives or financial situation.
Run your own numbers in the Negative Gearing Calculator.
Open the calculatorGeneral information only. Rates and thresholds change, usually on 1 July. Confirm current figures with the ATO or the relevant authority, and get personal advice for decisions about your situation.