Free tool
Investment Property Cash Flow Calculator
See what an investment property would cost — or pay — you each week, before and after tax, from the price, the loan, the rent and the running costs, under the 2026 negative gearing rules.
Property and loan
A loan of $520,000.
Rent and costs
Your tax
Before tax, it costs you
$179.62
A week — −$9,340 a year
After tax, it costs you
$122.14
A week in 2026–27 — −$6,351 a year
From 1 July 2027, it costs you
$179.62
A week — the loss is carried forward, not deducted from your salary
Gross yield
4.8%
$31,200 of rent a year on $650,000
What changes on 1 July 2027
For an established property bought after 7:30pm on 12 May 2026, a rental loss can reduce your salary only until 30 June 2027. From then on it can offset only income from residential property — rent from other properties, or a capital gain when you sell — and any excess is carried forward. On these figures that is $9,340 a year carried forward instead of $2,989 of tax saved. A new build, or a property you already owned on Budget night, keeps the old rules.
How the number is built
| Rent for 50 weeks let | $30,000 | |
| − | Management at 7% | $2,100 |
| − | Other running costs | $5,000 |
| − | Interest on $520,000 at 6.2%, first year | $32,240 |
| = | Cash flow before tax | −$9,340 |
| + | Tax saved on the $9,340 loss, 2026–27 | $2,989 |
| = | Cash flow after tax, 2026–27 | −$6,351 |
General information only. It uses the first year’s interest, 2026–27 resident tax rates and the negative gearing rules legislated in 2026, and assumes the rent, costs and rate hold for the year. It leaves out purchase costs, lenders mortgage insurance, the Medicare levy surcharge and capital growth. The treatment of a loss depends on your whole tax position — speak to a tax adviser before relying on it. It is not tax advice, credit assistance or a recommendation to buy any property. Our Credit Guide sets out who we are and how we are licensed.
Before tax: what leaves your account
Take a $650,000 property bought with a 20% deposit and a $520,000 interest-only loan at 6.2%. The interest is $32,240 a year. Rented at $600 a week, with two weeks a year empty, it collects $30,000; the agent takes $2,100 and rates, insurance and repairs another $5,000.
That leaves the property $9,340 a year short — $179.62 a week that has to come from your own pocket before any tax is considered. It is the figure to budget for, because it is the one that arrives every week.
After tax: what the loss saves
A rental loss can reduce the tax you pay on your salary, for as long as the property is allowed to be negatively geared. On $120,000 of other income, the $9,340 loss saves $2,988.80 in tax this year, and the property costs about $122 a week after tax instead of $180.
Depreciation widens the gap without costing cash. Add $5,000 a year of it and the tax saving rises to $4,588.80, bringing the after-tax cost down to about $91 a week. The cash shortfall has not changed; the tax on it has.
The 2026 rules, and why the tool asks
Negative gearing changed in the 2026 Budget, and the change is now law. From 1 July 2027 it is limited to new builds, with properties already held on Budget night — 7:30pm AEST on 12 May 2026 — left under the old rules. So the after-tax answer depends on which group your property falls into:
- Owned before 12 May 2026. Losses keep reducing your salary, until you sell.
- A new build. Losses keep reducing your salary, before and after 1 July 2027.
- An established property bought since. Losses reduce your salary only until 30 June 2027. From then on they offset residential property income — other rents, or a capital gain — and the rest is carried forward. On the example above, the property would then cost the full $180 a week after tax.
Our negative gearing calculator goes through the rules in detail, including what counts as a new build.
Interest-only or principal and interest
On principal and interest, the same $520,000 loan costs $38,218 in the first year, of which only $32,067 is interest; the other $6,151 pays down the loan. The principal is not deductible, so the property costs about $295 a week before tax and $238 after — more cash each week, though every dollar of it is building equity rather than going to the bank.
What would make it pay for itself
On the interest-only example, the rent would have to be about $800 a week to cover every cost before tax. A larger deposit, a lower rate or a higher-yielding property closes the gap from the other side — our rental yield calculator compares properties on yield alone. Whether a shortfall is worth carrying comes down to growth, and to how comfortably you can afford it, which is the conversation our investment and tax teams have with every investor before they buy.
Frequently asked questions
How do I work out the cash flow on an investment property?
Start with the rent you will actually collect, after weeks without a tenant. Take off the agent's fee, the running costs and the loan repayments. What is left is the cash flow before tax. Then add the tax a loss saves you, or take off the tax on a profit. On a $650,000 property with a $520,000 interest-only loan at 6.2% and rent of $600 a week, that comes to about $180 a week before tax and $122 a week after tax for someone earning $120,000.
Is a negative cash flow property a bad investment?
Not necessarily. A property that costs money each week is betting on growth to make up the difference, and many long-term investors buy that way deliberately. What matters is that you can afford the shortfall comfortably, including if rates rise or the property sits empty for a while, and that the property has a realistic prospect of growth. Buying a loss for the tax saving alone never adds up: the tax saved is always less than the money lost.
Can I still negatively gear a property I buy now?
It depends what you buy. A new build can be negatively geared as before. An established property bought after 7:30pm AEST on 12 May 2026 can be negatively geared only until 30 June 2027; from 1 July 2027 its losses can offset only residential property income, including capital gains, and the rest is carried forward. A property you owned, or had signed for, before then keeps the old rules until you sell.
Are principal repayments tax deductible?
No. Only the interest on an investment loan is deductible. On a principal-and-interest loan, the principal part of each repayment still leaves your account, so it reduces your cash flow, but it is not a deduction — it is paying off your own debt. That is why interest-only loans are common for investment properties, and why the calculator shows principal on its own line.
What is depreciation, and can I claim it?
Depreciation is a deduction for the wear on the building and on its fixtures and fittings, worked out by a quantity surveyor. It reduces your tax without costing any cash that year. On an established residential property bought since May 2017 you can generally claim only the building itself and anything you add new, not the existing fixtures; a new build usually has much larger claims, which is part of its appeal.
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Rental Yield
Gross and net yield on any property, after vacancy, the agent's fee and running costs — the first test of whether an investment pays its way.
Open tool →Negative Gearing
The tax a rental loss saves you under the 2026 rules — and what changes from 1 July 2027 if the property is established and bought since Budget night.
Open tool →Property Growth
What a property could be worth in five, ten or twenty years at a steady growth rate, and the equity you would hold as the loan comes down.
Open tool →