Negative Gearing Calculator
Use this free negative gearing calculatorto model the impact of Australia's 2026 loss quarantine reform on your investment property. See whether your property is grandfathered under the old negative gearing rules and project the cumulative tax impact over time.
Property
Annual Income & Expenses
Your Income
34.5% (incl. Medicare Levy)
Losses offset this first under new rules
Projection
New Rules Apply (Loss Quarantine)
Rental losses quarantined, not deductible against salary or wages
Annual Net Result
-$16,000
negatively geared
Old Rule Tax Saving
$5,520
New Rule Tax Saving
$0
⚠️ Reduced tax benefit over 10 years
-$63,281
compared to old rules
+ $183,422 quarantined losses released at sale
Cumulative Tax Benefit
10-Year Total
Understanding Australia's Negative Gearing Reform (2026)
Negative gearingoccurs when the costs of owning an investment property (interest, management fees, repairs, depreciation, etc.) exceed the rental income earned. Under current Australian tax law, this negative gearing loss is immediately deductible against all other income — including salary and wages — at the taxpayer's marginal tax rate. Our negative gearing calculator models both this existing benefit and the impact of the reform.
The negative gearing reform, effective for new investment property contracts signed from 12 May 2026, quarantines these rental losses. Under the new negative gearing rules:
- Rental losses can only offset other rental income in the same year — the negative gearing deduction against wages is removed
- Excess quarantined losses are carried forward and released when the property generates rental profit in future years, or against capital gains at sale
- The timing of the tax benefit is delayed, creating a cash flow cost that compounds over the holding period — modelled in the negative gearing calculator above
Who Is Grandfathered from the Negative Gearing Change?
Properties where a binding contract was signed before 12 May 2026 retain the current negative gearing rules for the life of that investment. The grandfathering applies to the specific property, not the investor. If you sell a grandfathered property and buy a new one, the new purchase falls under the new negative gearing loss quarantine. Our negative gearing calculator automatically applies the correct rule based on the contract date you enter.
New builds (off-the-plan apartments, newly constructed houses) are exempt from the quarantine regardless of contract date. Negative gearing deductibility is retained for new builds to encourage investment in housing supply.
How This Negative Gearing Calculator Works
Enter your property's contract date, annual rental income, loan interest, and your personal income. The negative gearing calculator instantly shows your Year 1 tax saving under old vs new rules, and projects the cumulative tax benefit gap across your entire holding period. If your property is grandfathered, the calculator shows your full negative gearing benefit continuing unaffected. If the new rules apply, it tracks quarantined losses and shows when they are released.
Negative Gearing Calculator — FAQ
What is the negative gearing reform and how does this calculator model it?
The negative gearing reform quarantines rental losses for new investment property contracts signed from 12 May 2026 — losses can no longer be deducted against wages. This free negative gearing calculator shows your Year 1 impact and projects the cumulative tax benefit difference over your full holding period, comparing old rules vs the new loss quarantine.
My property contract was signed before 12 May 2026 — does this negative gearing calculator apply to me?
Yes, but the negative gearing calculator will show you as grandfathered — old rules apply in full for as long as you hold that specific property. The loss quarantine reform does not affect you. Enter your contract date and the calculator will confirm your grandfathered status automatically.
What happens to quarantined negative gearing losses if I sell?
Under the proposed rules, any quarantined negative gearing losses are added to the cost base of the property at sale, reducing your capital gain. You still receive the tax benefit — just at the time of sale rather than annually. The negative gearing calculator shows the remaining quarantined loss balance at the end of your projection period.
Can I still deduct interest if my property turns cash-flow positive?
If the investment property becomes positively geared (rent exceeds all deductible expenses), the net profit is assessable income in that year. Any previously quarantined negative gearing losses would first offset this profit before you pay tax on the remainder. The negative gearing calculator tracks this year-by-year.
How does the new build exemption from the negative gearing reform work?
New residential builds — including off-the-plan purchases — are fully exempt from the negative gearing loss quarantine regardless of when they were contracted. Rental losses from a new build can still be immediately deducted against all income types, including salary, at your marginal rate. Select 'New Build' in the negative gearing calculator to confirm this.
Does this negative gearing calculator account for the CGT interaction?
This negative gearing calculator focuses on the income tax (negative gearing loss deduction) impact only. When you sell, quarantined losses would reduce your capital gain. For the full CGT picture, also use the CGT Change Calculator and consult a registered Tax Agent.