Negative gearing calculator

Optimise your tax savings with our powerful negative gearing calculator.

Negative Gearing Calculator Explanation

Make smart investment choices with negative gearing calculations

Negative gearing is a popular investment strategy in Australia that allows individuals to offset the costs of owning an investment property against their taxable rental income. By leveraging negative gearing, you can potentially reduce your tax liability while building a property portfolio.

Our negative gearing calculator helps you establish whether your investment property is positively or negatively geared, and provides you with an estimate of your potential tax benefit.

Simply input the relevant financial details of your investment property, and the calculator will crunch the numbers to provide you with an estimate of your negative gearing potential. It gives you valuable insights into the tax advantages you may enjoy and assists in making informed financial decisions.

Trusted nationwide by

Trusted By Chartered Accountants

#457713

Trusted By Tax Agents

#26099679

Trusted By ABN | BAS

#210056

Trusted By Australia Owned.

Proud Australian

iso

ISO 27001

Lodge your tax return quickly

No PAYG or Income Statement required

Pay nothing up front!

Pre-filled income details & deductions

Get help from a professional accountant

Evaluate the tax benefits of a negatively geared investment property

Calculate negative gearing tax impact:

Ownership percentage (%)

Annual rental income

Annual salary and other income

Annual property expenses:

Interest and other
finance cost

Property manager fees

Advertising

Council rates

Water rates

Land tax

Strata fees

Insurance

Repairs and maintenance

Property depreciation

Cleaning and pest control

The estimated results

0

Your rental property is experiencing positive gearing due to the rental income being higher than the expenses incurred. By adding the profits to your taxable income, you will be paying 0 more in personal income tax per year

Your rental property is experiencing negative gearing due to the rental income being lower than the expenses incurred. By deducting the losses from your taxable income, you can benefit from a yearly personal income tax savings of 0

Summary

Rental income

0

Total expenses

0

Profit/(loss) on property

0

Taxable income

0

Tax benefit/(additional tax)

info Icon
Tax benefit/(additional tax)

0

The information provided by our Negative gearing calculator is for estimation purposes only and should not be considered as professional tax advice.

Your actual taxation will need to take into account all of your personal circumstances, and this site is in no way a comprehensive calculator. Further please note:

  • This calculator estimates potential tax benefits and is not exhaustive for all tax scenarios.
  • It doesn't account for annual rent adjustments, property value appreciation, or inflationary impacts.
  • While it considers the 2022/2023 marginal tax rate, it excludes the Medicare levy, other levies, and tax credits.
  • Tax benefits are calculated by contrasting personal income tax with and without a property investment.
  • For a comprehensive understanding and personalised advice, always consult with a qualified tax professional.

Our fees

Starting from

$75

PAYG individual tax return


  • Affordable rates
  • Maximise refund.
  • Personalised service
  • Stay tax compliant
  • Safe and secure
  • Affordable fees
Book a meeting

Starting from

$145

Investor and sole trader


  • Register for free
  • Prepared by professionals
  • Simply Email your docs
  • Dedicated support
  • Safe and secure
  • Affordable fees
Book a meeting

Starting from

$299

Business tax returns


  • Fixed, transparent pricing
  • 2 Week lodgement process
  • Xero/QuickBooks/MYOB
  • BAS/IAS (Add-On)
  • Safe and Secure
  • Payroll and super (Add-On)
Book a meeting

Tips for successful negative gearing strategies

  • Thorough research: Conduct extensive research on the property market, rental demand, and projected capital growth.
  • Financial planning: Create a comprehensive plan aligning your strategy with financial goals and seek guidance from a professional.
  • Property selection: Choose high-demand properties in locations with potential for capital growth.
  • Cash flow management: Assess and budget for property expenses, including loan repayments and emergency funds.
  • Tax planning and advice: Consult a tax professional to maximize eligible deductions and optimize your strategy.
  • Regular property review: Monitor performance, stay updated on market conditions, and make adjustments as needed.

These practical tips will help you navigate negative gearing successfully.

Negative Gearing Strategy

Negative gearing V/S Positive cash flow

Negative gearing and positive cash flow are pivotal concepts in property investment, each influencing financial returns differently. Tabulated below are the key contrasts between these two approaches.

Negative gearing V/S Positive cash flow

The benefits of investing in a negatively geared property

Tax deductions

Tax deductions

Negative gearing allows investors to deduct property-related expenses from their taxable income, reducing their tax bill.

Potential for capital growth

Potential for capital growth

While costs may exceed rental income initially, property values can appreciate, leading to profit upon sale.

Asset accumulation

Asset accumulation

Investors can acquire valuable properties with minimal upfront investment, growing their asset portfolio.

Tax refund opportunities

Tax refund opportunities

If negative gearing results in a tax refund, investors benefit from additional cash flow and can adjust tax with holdings.

Long-term wealth creation

Long-term wealth creation

Despite short-term costs, the combined benefits can lead to long-term financial growth and security.

Why choose ZedPlus?

Our team at ZedPlus comprises experienced tax professionals proficient in handling complex tax calculations with precision.

  • In-depth knowledge: With extensive knowledge of the Australian tax system, we navigate the intricacies and ensure optimal results.
  • Accurate tax calculations: Rest assured, your tax returns are meticulously prepared to minimize errors and maximize accuracy.
  • Simple process: We believe in a hassle-free experience. Our streamlined process ensures a seamless tax filing journey for you.
  • Confidentiality: Your data and financial information are treated with the utmost confidentiality and safeguarded at every step.
  • Compliance and timeliness: Our commitment to compliance ensures your tax returns are filed on time, avoiding penalties.
  • Transparent communication: We keep you informed throughout the process, providing clear explanations and insights.

Contact us

Are you still in the process of gathering all the necessary information for your Tax Return?

Complete our online form to begin the process, and we'll set up your account with the ATO

Complete online form

We're here to assist you.

Our experts will assist you in finding, selecting, and paying off your home loan  online. At your convenience, speak with one of our home loan advisors.

Happy clients

We are proud to offer superior customer services. We get glowing reviews from our clients. Let's check some of the testimonials!

Highly recommended

Very professional team, supported us throughout the application process, keeping us informed of progress and always kind and courteous. Thank you so much to Khyati and Anshu for all their assistance in helping us with our home loan. Highly recommended

- Sylvia SP (NSW)
Best broking service

I reckon best broking service. Very helpful, knowledgeable and professional in dealing with Zedplus. Highly recommend esp. dealing with Khyati. Attention to detail and follow up with queries very promptly.

- Nd (NSW)
Zedplus 5 star

Being a first home buyer, I was very concerned about the whole loan process, how will I get my loan sorted, which bank to reach to get the best interest rate, how should I split my money between the fixed and the variable rate of interest, what '

- Ashmeet Arora (VIC)
Zedplus 5 star

Being a first home buyer, I was very concerned about the whole loan process, how will I get my loan sorted, which bank to reach to get the best interest rate, how should I split my money between the fixed and the variable rate of interest, what '

- Ashmeet Arora (VIC)
Click for more reviews

Frequently asked questions

The impact of negative gearing on your taxation can be summarized as follows:

  • Deductible Losses: The losses incurred due to negative gearing can be claimed as tax deductions against your total taxable income. This reduces your overall taxable income and consequently reduces the amount of tax you are required to pay.
  • Cash Flow Benefits: The tax deductions resulting from negative gearing can provide immediate cash flow benefits by reducing your tax payable each financial year. This may result in higher disposable income, allowing you to better manage your financial commitments.
  • Capital Gains Tax (CGT): If you sell the investment property in the future and make a profit (capital gain), the deduction claimed through negative gearing may reduce the cost base of the property. This could lead to a higher capital gain and an increased tax liability when the property is sold.
  • Investment Risk: Negative gearing should not be pursued solely for the purpose of tax benefits. It is crucial to carefully evaluate the financial feasibility and risks associated with any investment.

As an investment property owner in Australia, you can claim several types of deductions. These include:

  • Interest on your loan used to purchase the property
  • Rental property management fees
  • Repair and maintenance costs
  • Insurance premiums
  • Council rates and land tax
  • Water rates
  • Depreciation on assets like fixtures and fittings
  • Costs associated with advertising for tenants
  • Legal expenses related to tenant disputes or eviction
  • Costs associated with cleaning the property or pest control services

It's important to keep detailed records of these expenses to substantiate your claims.

In Australia, you can only claim deductions for the periods the property is rented out or is genuinely available for rent. If the property is not tenanted, and it's not actively being advertised for rent, then you typically can't claim deductions. However, if your property is available for rent and you're actively seeking tenants (for example, it's advertised online or through an agent), then you may be able to claim deductions for this period. As the specifics can vary, it's always best to consult with a tax advisor or the Australian Taxation Office for advice on your situation.

There are several risks associated with negative gearing. For example, if property values do not increase as expected, you may end up in a financial situation where the capital gains do not cover the accumulated losses. Moreover, if the property remains vacant without rental income for an extended period, servicing the loan becomes a challenge. The investment also depends heavily on the stability and future changes of tax legislation. A downturn in the property market, higher than expected maintenance costs, or changes in interest rates can also impact the financial viability of negatively geared properties.

No, negative gearing is not exclusive to property. It can also be applied to other income-generating assets like shares or businesses. If the costs (like interest on borrowed money) associated with these investments are higher than the income they generate, these investments can also be negatively geared. However, property is the most common asset associated with negative gearing due to the large loan amounts and related costs, and the potential for long-term capital appreciation.

When you sell a negatively geared property, any profit you make from the sale is considered a capital gain and is subject to capital gains tax (CGT). However, the Australian tax system provides a concession where if you've held an asset for more than 12 months before selling it, you're only taxed on 50% of the capital gain. This is known as the CGT discount.

Yes, as an owner of a negatively geared property, you can claim the costs of repairs and maintenance. This includes costs associated with repairing damage, defects, or deterioration of the property. However, be aware that "repairs and maintenance" does not include significant improvements or renovations - these costs are usually considered capital works and are subject to different tax rules. For instance, they might need to be depreciated over time, rather than deducted in the year they're incurred. Consulting with a tax professional can help clarify these distinctions.

Book a meeting with us

Other calculators: