Start with the rental tax result

A negatively geared rental has rental income below its deductible expenses, including eligible borrowing interest. Whether that loss reduces other taxable income depends on the rules and your circumstances. A deduction does not reimburse the whole expense.

Cash flow is a separate calculation because principal repayments leave your bank account, while non-cash deductions may not. A cash-flow shortfall alone does not tell you the taxable loss.

An illustrative loss, with an assumed current-year offset
Rental tax loss$10,000Income less eligible deductions.
Possible tax reduction$3,200At a user-entered 32% marginal rate.
Loss after tax effect$6,800This is not necessarily the cash holding cost.

Assumes the entire loss can offset income at 32% in the same year. This is an arithmetic example, not an eligibility calculation.

Principal changes the money you need

Suppose the property also requires $5,000 in principal repayments and has no non-cash deductions. Its cash shortfall before tax would be $15,000. Under the example's tax assumption, the shortfall after that tax effect would be $11,800, or about $227 per week.

If the loss cannot reduce tax that year, the current-year contribution stays at $15,000. A possible future benefit is not money available to meet today's repayment.

Which rules apply to your purchase?

Check the tax year and acquisition date.

Treasury reported on 4 August 2026 that core negative-gearing and CGT reform legislation had passed in June. Further provisions, including the definition of a new dwelling, were then under consultation. This calculator does not determine eligibility under those reforms.

Before using a loss offset, confirm how the applicable rules treat your property and income year. Ask about acquisition timing, dwelling type and losses that cannot be used immediately. Do not treat a proposed definition as a final rule.

Sources: Treasury: August 2026 reform update and ATO rental properties guide.

Use the calculator in two passes

First calculate rent, expenses and full loan repayments before tax. Then, if useful, open the optional tax assumptions and enter your marginal rate and deductions. The assumption that losses reduce tax this year is off until you choose it.

Keep both outcomes. A tax benefit can change the cost of holding the property, but it does not establish its future rent, value or suitability. Read which expenses to review before filling the tax fields.