Property Investment Analyser Australia

This property investment analyser works out negative gearing, after-tax cash flow at your marginal rate and year-by-year equity on an Australian rental.

Property Investment Analyser Australia
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What it does

The Property Investment Analyser works out the annual cash flow and tax position of an Australian investment property, including the tax benefit of any rental loss at your marginal rate, and projects cash flow and equity over time.

Data sources & parameters

The figures below drive this calculator. We keep them aligned with the latest official guidance, and each result recalculates automatically whenever a value changes.

ParameterValueSourceLast updated
Resident income tax bracketsRate scheduleato.gov.auEffective 2026-07-01FY2026-27 rates (15% on $18,201-$45,000). Ends 2027-06-30: the scheduled 2027-07-01 row (14%) takes over. audit 2026-09-23
Medicare levy rate0.02ato.gov.auEffective 2024-07-01Confirmed unchanged and current for FY2026-27 against the official source. Open-ended (was to 2027-06-30): statutory, not indexed, no change legislated; audit 2026-09-23
Medicare levy low-income threshold28,011ato.gov.auEffective 2025-07-01Window opened: the threshold is indexed annually and there is no successor row, so closing it at 2027-06-30 would have fallen back to the undated 26,000 row
Low Income Tax Offset maximum700ato.gov.auEffective 2024-07-01Confirmed unchanged and current for FY2026-27 (ATO). Open-ended (was to 2027-06-30): statutory, not indexed, no change legislated; audit 2026-09-23
LITO shade-out start37,500ato.gov.auEffective 2024-07-01Confirmed unchanged and current for FY2026-27 against the official source. Open-ended (was to 2027-06-30): statutory, not indexed, no change legislated; audit 2026-09-23
LITO second taper start45,000ato.gov.auEffective 2024-07-01Confirmed unchanged and current for FY2026-27 against the official source. Open-ended (was to 2027-06-30): statutory, not indexed, no change legislated; audit 2026-09-23
LITO phase-out end66,667ato.gov.auEffective 2024-07-01Confirmed unchanged and current for FY2026-27 against the official source. Open-ended (was to 2027-06-30): statutory, not indexed, no change legislated; audit 2026-09-23
LITO taper 10.05ato.gov.auEffective 2024-07-01Confirmed unchanged and current for FY2026-27 against the official source. Open-ended (was to 2027-06-30): statutory, not indexed, no change legislated; audit 2026-09-23
LITO taper 20.015ato.gov.auEffective 2024-07-01Confirmed unchanged and current for FY2026-27 against the official source. Open-ended (was to 2027-06-30): statutory, not indexed, no change legislated; audit 2026-09-23

We always strive to use the latest data for every variable so our results and reports are as accurate as possible. Even so, errors are possible — you should not rely on this tool or its report alone, and we accept no liability for any decision made based on it.

The formula

Tax benefit = tax(other income) - tax(other income + net rental result)

How it works

It totals rental income and deductions (interest, cash expenses, depreciation), finds the net rental result, then compares your total tax with and without that result to give the real tax benefit.

Where it is used

  • Testing negative vs positive gearing
  • Estimating after-tax weekly cost
  • Projecting equity over time

Worked example

On a A$600,000.00 property the loss creates a tax benefit of …, leaving after-tax cash flow of ….

Use this Pro calculator to see whether an Australian investment property is negatively or positively geared, what it really costs you each week after tax, and how your cash flow and equity change over time. Enter the purchase and loan figures, the rent and expenses, and your other taxable income.

What negative gearing means

A property is negatively geared when the deductible costs of holding it, including loan interest, rates, insurance, management fees, repairs and depreciation, add up to more than the rent it earns. That shortfall is a loss, and in Australia a rental loss can be deducted against your other income, reducing the tax you pay. So part of the holding cost is effectively covered by a lower tax bill.

The opposite, positive gearing, means the property earns more than it costs and adds to your taxable income. This analyser handles both and shows the net after-tax position either way.

How the analyser works

It totals your annual rent (weekly rent × 52) and your deductions, then finds the net rental result. To value the tax effect properly it does not just apply a flat marginal rate; it works out your total tax with and without the rental result added to your other income, using the current resident tax brackets, the Medicare levy and the Low Income Tax Offset. The difference is the true tax benefit (or extra tax) of the property.

Cash flow is reported separately from the tax result, because depreciation is a paper deduction that lowers tax without costing you cash. Your after-tax cash flow is rent minus cash expenses minus interest, plus the tax benefit.

The multi-year projection

Holding property is a long-term decision, so the analyser projects each year of the period you choose. Rent and cash expenses grow at your chosen rate, the property value compounds at the capital-growth rate, and the tax benefit is recalculated every year. The schedule shows the yearly cash flow, the property value and your equity (value minus loan), so you can see the point at which growth and rising rent turn a negatively geared property cash-flow positive.

A worked example

Consider an A$700,000 unit bought with a A$560,000 interest-only loan at 6.5%, renting for A$580 a week, held by an investor on A$120,000 a year.

  • Annual rent: A$580 × 52 = A$30,160.
  • Loan interest: A$560,000 × 6.5% = A$36,400.
  • Cash expenses (rates, strata, insurance, management, repairs): A$9,000.
  • Depreciation (a non-cash deduction): A$8,000.

Total deductions are A$53,400 against A$30,160 of rent, a rental loss of A$23,240. At the investor's 37% marginal rate plus 2% Medicare levy, that loss cuts their tax by about A$9,064. But depreciation is only a paper cost, so the actual cash shortfall is rent (A$30,160) minus interest (A$36,400) minus cash expenses (A$9,000) = −A$15,240, offset by the A$9,064 tax benefit. The property costs about A$6,176 a year, or roughly A$119 a week, out of pocket after tax, the price of holding it while it (hopefully) grows in value.

Reading cash flow versus wealth

A property can drain your weekly cash flow yet still build wealth if capital growth and loan reduction outpace the holding cost, which is the bet behind negative gearing. The analyser separates the two so you do not confuse them: the cash-flow line tells you what the property demands from your budget each week, while the equity line tells you what you are accumulating. A tax refund is not free money; it is a partial rebate on a genuine loss. If a property only works because of the tax deduction, it is worth asking whether the underlying investment stacks up on growth alone.

Common mistakes to avoid

  • Treating the tax refund as profit. Negative gearing softens a loss; it does not turn a poor investment into a good one.
  • Forgetting CGT on the eventual sale. Growth is taxable when you sell, so model it with the Capital Gains Tax Calculator before counting your gains.
  • Ignoring vacancy and rate rises. A few weeks untenanted or a jump in interest rates can swing the weekly cost sharply; stress-test the numbers.
  • Overlooking land tax. Above the state threshold, land tax adds a recurring cost this tool does not include.

Depreciation: the deduction that costs no cash

Depreciation deserves special attention because it is what separates a property's tax result from its cash result. Two allowances exist: capital works (the building's structure, typically deductible at 2.5% a year for 40 years) and plant and equipment (removable assets such as ovens, carpets and air-conditioning, written off over their effective lives). Neither leaves your pocket each year, since the money was spent when the property was built or the asset installed, yet both reduce your taxable rental result, and therefore your tax. That is why a property can post a paper loss while its cash position is close to neutral. A quantity surveyor's depreciation schedule is usually needed to claim these properly; note that for second-hand residential property, deductions for previously used plant and equipment are restricted, so newer properties generally offer larger depreciation benefits.

Assumptions and limitations

The projection assumes an interest-only loan (interest held flat) and that rent and expenses grow together, a planning model, not a precise forecast. It does not model capital gains tax on sale (use the Capital Gains Tax Calculator), land tax, or changes to your income over time. Rates, brackets and the Medicare levy stay current automatically.

This is general information, not financial or tax advice. Confirm your figures and strategy with a licensed adviser or registered tax agent before acting.

About This Property Investment Analyser

Use this property investment analyser to get an instant, accurate estimate. The figures follow official ATO guidance and every rate and threshold is kept up to date for 2026. Adjust the inputs above to match your situation, or browse all our calculators to plan your next step.

Tax year 2026

Frequently asked questions

What is negative gearing?
A rental property whose deductible costs (interest, expenses, depreciation) exceed its rent, creating a loss you can deduct against your other income.
How is the tax benefit calculated?
By comparing your total tax with and without the net rental result added to your income, using the resident brackets, Medicare levy and Low Income Tax Offset.
Does depreciation affect cash flow?
No. Depreciation is a paper deduction that lowers tax without costing cash, so it is excluded from the cash-flow figure but included in the tax benefit.
Is negative gearing worth it?
It depends on your marginal rate and expected capital growth. The year-by-year projection shows when rising rent and growth turn the property cash-flow positive.
Does this include capital gains tax?
No. Use the Capital Gains Tax Calculator to estimate the tax on an eventual sale.
Can a property be negatively geared and still grow your wealth?
Yes, if capital growth over time outweighs the after-tax cash cost of holding the property, the investment can still build wealth overall, even though it costs you money year to year, which is why the tool separates cash flow from wealth.
Does the analyser assume the property is held for a fixed number of years?
You choose the projection period, and the multi-year view shows how the figures evolve as rent, loan balance and depreciation change over that time, rather than relying on a single snapshot year.

About the author

Taha Kheirandish

Written and reviewed by

Taha Kheirandish

Economics student and independent researcher

Taha Kheirandish reads tax codes the way other people read maps — to find out where a system actually leads, not where it claims to go.

He is an economics student, and his work here is comparative by design. A pension deferral bonus in Quebec, a commuting allowance in Germany, a rent-increase ceiling in the Netherlands: each is a decision a government made about how money should move, and each reads differently once you set it beside eight others. He builds and checks these calculators across nine markets from primary sources — the regulation rather than a summary of it, the ministry’s own circular rather than a news item quoting it.

That is the editorial standard of the site as well as his habit. Every rate, threshold and bracket here carries the document it was read from and the date it takes effect, and gets re-checked when the law moves rather than when someone happens to notice.

He is a researcher, not a licensed adviser, and nothing on this site is personal financial advice. It is arithmetic done carefully with its sources shown — so that you can check it, and take it to someone who is.

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