Free calculator — changes 1 July 2027
Negative Gearing Calculator
See your annual tax benefit, monthly out-of-pocket cost, and exactly what the 2027 negative gearing changes mean for your investment property.
Negatively geared
ANNUAL LOSS
$18,400
rent − costs
TAX BENEFIT
$5,888
per year
NET OUT-OF-POCKET
$1,043/mo
after tax refund
From 1 July 2027 — new properties only get this deduction
Negative gearing is restricted to new builds from 1 July 2027. Existing properties are grandfathered — but new investors in established properties lose this tax benefit.
WITH GEARING (now)
$1,043/mo
NO DEDUCTION (post-2027)
$1,533/mo
+$490/month extra for new investors in established properties after 1 July 2027.
Annual cash flow
Ongoing costs estimated at 1% of property value. Estimates only — not financial advice.
Your after-tax cost is $1,043/month
See how this property compares to ETF investing over 20 years.
See my full plan →How negative gearing works — and what changes in 2027
Negative gearing lets property investors deduct rental losses against their other income. If your interest, council rates, maintenance and management fees add up to more than your rent, the shortfall reduces your taxable income. On a $120,000 salary at a 32% marginal rate, every $1 of rental loss saves 32 cents in tax.
The 2026 federal budget announced that from 1 July 2027, this deduction will only be available for new builds. Investors in established properties will continue to benefit if they owned the property before the cutoff — but new buyers of existing properties will lose the tax offset entirely. This fundamentally changes the economics of buying older investment properties.
The change arrives alongside the CGT discount removal in 2027. For investors planning to buy and then sell an established property, both the negative gearing deduction and the 50% CGT discount will be gone — making the risk/return profile significantly less attractive than it was for the previous generation of property investors.
Frequently asked questions
What is negative gearing?
Negative gearing occurs when the costs of owning an investment property (interest, rates, maintenance, management fees) exceed the rental income. The resulting loss is tax-deductible against your other income — reducing your income tax bill. On a $120,000 income, a $15,000 annual property loss generates roughly $4,800 in tax saving.
What changes to negative gearing in 2027?
From 1 July 2027, negative gearing deductions are restricted to newly built properties. Investors in established properties can no longer offset rental losses against their salary or business income. Existing investors who owned their property before that date are grandfathered — their deductions continue. Only new investors in established properties after 1 July 2027 lose the benefit.
Is negative gearing always worth it?
Negative gearing is only worthwhile if you expect capital growth to outweigh the after-tax losses you carry. If a property is $15,000 negatively geared and generates a $4,800 tax benefit, you're still losing $10,200 per year in cash. The bet is that property value growth over 10–15 years will more than compensate. It's not a tax strategy; it's a capital growth bet that happens to reduce your tax bill.
How much does a negatively geared property reduce my tax?
Tax saving equals (annual rental loss) × (your marginal tax rate). On a $25,000 annual loss at a 37% marginal rate, you save $9,250 per year — or $771/month. At a 32% marginal rate ($45,001–$135,000 income), the same loss saves $8,000/year.
Can I still negatively gear if I buy after July 2027?
Only for new builds purchased after 1 July 2027. 'New' means newly built properties — either off-the-plan or newly completed. Buying an established investment property after that date means the negative gearing deduction is no longer available. The restriction is on the investor purchasing the property, not the property itself.