Free calculator · Includes 2027 CGT impact
Rent vs Buy Calculator
Compare buying a home against renting and investing the deposit. See the net wealth difference over your chosen timeframe — including how the 2027 CGT changes shift the equation.
$150,000
$2,600/mo
Interest rate
6.5%
Property growth
4.5%
Tax rate
32.5%
After 10 years
Renting + investing ahead (pre-2027 CGT)
Buy net equity
$627k
Rent + invest (pre-2027)
$674k
2027 CGT change impact
ETF portfolio (buy now, pre-2027 rules)
$674k after CGT
ETF portfolio (buy after Jul 2027)
$656k after CGT
The 2027 CGT change reduces the after-tax return on ETF portfolios by $18,490, making the rent-and-invest strategy slightly less attractive post-2027.
Estimates only. NSW stamp duty used for illustration. Assumes 30-year P&I loan, 7% ETF return, 1.5% annual running costs. PPOR sale is CGT-exempt. Not financial advice.
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The buyer purchases the property with the chosen deposit, pays stamp duty and conveyancing, services a 30-year principal and interest mortgage, and pays 1.5% of property value annually in running costs (rates, insurance, maintenance). At the end of the chosen period, the property is sold at the projected market value, minus agent fees (2.5%) and the remaining mortgage. The family home is CGT-exempt on sale — this is a significant tax advantage that the calculator correctly models.
The renter invests the entire deposit plus any monthly surplus (mortgage − rent) into a diversified ETF portfolio earning the assumed 7% p.a. return. At the end of the period, the portfolio is sold and CGT is applied. The calculation shows two scenarios: ETFs purchased now (under the current 50% CGT discount) and ETFs purchased after 1 July 2027 (under the new 30% floor rules).
Frequently asked questions
Is it better to rent or buy in Australia?
It depends on your timeframe, property market, and investment discipline. Buying builds equity in an asset that grows with the market — and the family home is CGT-exempt on sale. Renting and investing the deposit + monthly savings can outperform buying if property growth is low and share market returns are high. The longer your timeframe, the more buying tends to win, because mortgage repayments stay fixed while rent rises with inflation. At 5–7 years, the outcome is genuinely uncertain. At 20+ years, buying in most Australian markets has historically outperformed.
How does the 2027 CGT change affect rent vs buy?
The 2027 CGT reform removes the 50% discount on capital gains from 1 July 2027, replacing it with a 30% floor. This affects the after-tax return on ETF portfolios held outside super — a core component of the rent-and-invest strategy. The family home is exempt from CGT entirely. The net effect is that rent-and-invest becomes slightly less attractive post-2027, while buying a PPOR retains its CGT exemption. The calculator shows the difference between buying ETFs now (under 50% discount rules) vs after July 2027.
What deposit do I need to buy a home in Australia?
Most lenders require at least 20% to avoid Lenders Mortgage Insurance (LMI). With the First Home Guarantee scheme, eligible first home buyers can purchase with as little as 5% deposit (government guarantees the remaining 15%). On a $750,000 home, a 20% deposit is $150,000 — plus stamp duty (varies by state) and conveyancing ($1,500–$3,000).
Does renting and investing really work as an alternative to buying?
Yes, but it requires consistent investment discipline that most people don't maintain. The maths works when the renter takes every dollar they would have spent on a mortgage above their rent and invests it in a diversified portfolio. In practice, lifestyle inflation, spending the surplus, and a higher required return on the alternative investment make it harder than it sounds. The calculator assumes the renter invests the entire difference — which is the best-case scenario for renting.
Should I include stamp duty in my rent vs buy comparison?
Yes — stamp duty is a significant upfront cost that the renter doesn't pay. On a $750,000 home in NSW, stamp duty is roughly $26,235. The renter can invest that money instead, which gives them a meaningful head start. The calculator includes stamp duty as an upfront cost for the buyer and models the renter investing it alongside the deposit.