How does negative gearing benefit property investors?

Negative gearing provides a tax benefit by allowing rental property losses to offset your salary or other income. For example, if you have a $10,000 loss and your marginal tax rate is 37%, you save $3,700 in tax.

What expenses can I claim for negative gearing?

Deductible expenses include loan interest, council rates, water rates, insurance, property management fees, repairs and maintenance, depreciation on the building and fixtures, and other costs related to earning rental income.

What are Australian marginal tax rates for 2024-25?

For 2024-25, Australian marginal tax rates are: 0% up to $18,200, 19% for $18,201-$45,000, 30% for $45,001-$135,000, 37% for $135,001-$190,000, and 45% over $190,000.

Negative Gearing Calculator

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Investment Property Tax Calculator

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🇦🇺 Australian Tax Rules 2024-25

Property & Loan Details

Property Value ($) Current market value

Loan Amount ($) Outstanding mortgage balance

Interest Rate (% p.a.) Annual interest rate

Weekly Rent ($) Expected weekly rental income

Annual Property Expenses

Council Rates ($)

Water Rates ($)

Insurance ($) Building & landlord insurance

Property Management ($) Typically 7-10% of rent

Repairs & Maintenance ($)

Other Expenses ($) Advertising, legal fees, etc.

Depreciation Deductions

Building Depreciation ($) 2.5% of construction cost (post-1987)

Fixtures Depreciation ($) From quantity surveyor schedule

Select Your Marginal Tax Rate (2024-25)

0% $0 - $18,200

19% $18,201 - $45,000

30% $45,001 - $135,000

37% $135,001 - $190,000

45% $190,001+

📉 Negatively Geared

-$0

Annual Net Rental Income/Loss

Investment Summary

Tax Benefit

Annual Tax Refund

Rental Income

Annual ($550/week)

Total Deductions

Interest + Expenses

After-Tax Position

Net Cash Flow

Deductions Breakdown

Interest (0%)

Depreciation (0%)

Expenses (0%)

Tax Benefit Calculation

Annual Rental Income $0

Loan Interest -$0

Property Expenses -$0

Depreciation -$0

                    Net Rental Loss
                    -$0
                

Marginal Tax Rate 30%

                    Tax Benefit (Loss × Rate)
                    $0
                

10-Year Projection (3% Annual Growth)

Year	Property Value	Rental Income	Total Expenses	Net Position	Tax Benefit	After-Tax Cost

Tax Benefit Formula

Tax Benefit = Rental Loss × Marginal Tax Rate

Understanding Negative Gearing

What is Negative Gearing?

Negative gearing occurs when your investment property expenses exceed your rental income. The loss can be offset against your other taxable income (like salary), reducing your overall tax bill. It's a popular investment strategy in Australia.

Deductible Expenses

Loan interest payments
Council and water rates
Building and landlord insurance
Property management fees
Repairs and maintenance
Depreciation (building & fixtures)

Australian Tax Rates 2024-25

$0 - $18,200: 0% (tax-free)
$18,201 - $45,000: 19%
$45,001 - $135,000: 30%
$135,001 - $190,000: 37%
$190,001+: 45%

Important Considerations

Negative gearing relies on capital growth
Interest rate rises affect cash flow
You need other income to offset losses
Depreciation rules changed after May 2017
Always seek professional tax advice

Investment Property Tax Calculator

Property & Loan Details

Annual Property Expenses

Depreciation Deductions

Select Your Marginal Tax Rate (2024-25)

Investment Summary

Deductions Breakdown

Tax Benefit Calculation

10-Year Projection (3% Annual Growth)

Tax Benefit Formula

Understanding Negative Gearing

What is Negative Gearing?

Deductible Expenses

Australian Tax Rates 2024-25

Important Considerations

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