Negative gearing occurs when the costs of owning an investment property — including interest payments, management fees, council rates, insurance, and maintenance — exceed the rental income it generates. The resulting loss can be offset against your other income (such as your salary), reducing the amount of tax you pay.

For example, if your property runs at a $10,000 annual loss and your marginal tax rate is 37%, you receive a $3,700 tax refund — meaning the property is costing you $6,300 net per year rather than $10,000. This calculator shows your after-tax cashflow and true weekly cost automatically.

When you sell an investment property in Australia, any profit above your cost base is a capital gain and is added to your taxable income for that year. The way CGT is calculated depends on your ownership structure:

Individual (Indexation method): The cost base is inflated by CPI each year, so only the real gain above inflation is taxable. Any carry-forward losses (from post-2026 negative gearing rules) are offset against the gain first, then the remainder is taxed at your marginal rate.

Cost base before indexation = Purchase price + acquisition costs (stamp duty, LMI, legal fees, etc.)
Indexed cost base = Cost base before indexation × (1 + inflation rate)^{years held}
Total cost base = Indexed cost base + selling costs
Taxable gain = Sale price − Total cost base − Carry-forward losses
CGT = Taxable gain × Marginal tax rate at time of sale

Example: Buy at $600,000 + $23,525 acquisition costs = $623,525 cost base. Sell after 5 years at $841,531, 4% inflation, 37% MTR, $27,538 selling costs, no losses.
Indexed cost base = $623,525 × 1.04⁵ = $758,959  |  Gross gain = $841,531 − $758,959 − $27,538 = $55,034  |  CGT = $55,034 × 37% = $20,363

Trust (Indexation method): Identical calculation to Individual — acquisition costs are added to the purchase price before CPI indexation, selling costs are added after, and any carry-forward losses are offset first. The resulting taxable gain is distributed to beneficiaries and taxed at their marginal rate.

Cost base before indexation = Purchase price + acquisition costs (stamp duty, LMI, legal fees, etc.)
Indexed cost base = Cost base before indexation × (1 + inflation rate)^{years held}
Total cost base = Indexed cost base + selling costs
Taxable gain = Sale price − Total cost base − Carry-forward losses
CGT = Taxable gain × Beneficiary's marginal tax rate

SMSF (accumulation phase): A one-third CGT discount applies, with the remaining gain taxed at 15% — giving an effective rate of 10%.

SMSF (retirement/pension phase): 0% CGT — one of the most powerful tax advantages available to Australian investors.

Company: No CGT discount. The full gain is taxed at the company rate of 30%.

Lenders Mortgage Insurance (LMI) is a one-off insurance premium charged by lenders when you borrow more than 80% of the property's value (i.e. your LVR exceeds 80%). It protects the lender — not you — in the event you default on the loan.

LMI can add thousands to your upfront costs. For example, on a $600,000 property with a 10% deposit ($540,000 loan, 90% LVR), LMI is typically around $12,960. This calculator automatically estimates LMI based on your loan-to-value ratio.

You can avoid LMI by saving a 20% deposit, using a guarantor, or accessing a government scheme such as the First Home Guarantee.

Stamp duty (also called transfer duty) is a state government tax charged on property purchases. Each state and territory has its own rate schedule. This calculator applies the 2025-26 rates for all eight states and territories — just select your state and the stamp duty is calculated automatically.

For example, on a $600,000 investment property in Queensland, stamp duty is approximately $20,025. In Victoria it would be around $31,070, and in NSW around $22,490.

Gross rental yield is annual rent divided by property price. A yield above 4% is generally considered reasonable, while 5–6%+ is considered strong. However, yield alone doesn't tell the full story — you also need to account for vacancy, expenses, interest costs, and capital growth potential.

This calculator shows both gross rental yield and net after-tax cashflow so you can assess the true return on your investment.

Pre-tax cashflow is simply rental income minus all property expenses (including interest). If this is negative, the property is negatively geared.

After-tax cashflow accounts for the tax benefit (or liability) created by the property. If the property is negatively geared, the loss reduces your taxable income and you receive a partial refund via your tax return — improving your actual out-of-pocket cost. This is the most accurate measure of what the property truly costs (or earns) you each week.