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Negative gearing impact calculator

What the proposed 1 July 2027 negative gearing reform would do to your annual and weekly cashflow, if it is legislated as proposed.

This reform is not yet law. It is based on the 2026-27 Federal Budget announcement of 12 May 2026. Every figure below that depends on the reform is shown on the assumption it is legislated as proposed. Final rules may differ once Parliament passes the bill.

Annual cashflow change from 1 Jul 2027 $0 Assuming the announced Budget 2026-27 changes are legislated as proposed.
Per week $0
Your rental result $0
Your marginal tax rate 0% Including the Medicare levy.
Today vs from 1 July 2027
Today (settled law)
$0/yr

Tax benefit of negative gearing at your marginal rate. Current law, confident.

From 1 Jul 2027 (your property class)
$0/yr

Assuming the announced Budget 2026-27 changes are legislated as proposed.

Today
$0
From 1 Jul 2027
$0

Today's deduction against salary versus what remains from 1 July 2027 for your property class. Assuming the announced changes are legislated as proposed.

This is your personal tax cashflow, not a lender's borrowing capacity. It is a different number for a different purpose. If your lender applies the negative-gearing add-back at your marginal rate, your borrowing power moves too. FGO Finance Group can assess which lenders still apply the add-back for your property class. See our borrowing power calculator for capacity.
FGO Finance Group structures investment purchases around this.

Our job is to match you to the right banks. Serviceability and the fine print change lender to lender, so we bring clarity to whatever you are unsure about: which lenders still apply the add-back, which property class protects your cashflow, and how to time a purchase against the 12 May 2026 line.

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Methodology

How this calculator works

Negative gearing lets you deduct a rental property's net loss (rent minus interest minus other costs) against your other income at your marginal tax rate. That is settled law today: a $18,250 loss for an investor on a 39% marginal rate returns $7,118 at tax time. This tool calculates that benefit from your inputs, then shows what remains from 1 July 2027 for your property class, assuming the announced Budget 2026-27 changes are legislated as proposed.

For established property bought after 12 May 2026, the proposed reform quarantines the loss: you stop deducting it against salary and carry it forward against future rental income or the eventual capital gain. New builds and grandfathered holdings are unaffected under both current law and the proposed reform.

Sources and authorities
AuthorityWhat it coversVerified
Australian Taxation Office: rental property income and lossesThe settled-law deductibility of rental losses against salary, marginal rate calculation including Medicare levyJune 2026
The Treasury: Budget 2026-27 factsheet "Negative Gearing and Capital Gains Tax Reform"The 7:30pm AEST 12 May 2026 boundary, the 1 July 2027 start date, the new-build carve-out, the quarantining and carry-forward treatment for established propertyJune 2026
Assumptions

What we assumed

Every assumption in the model, on the table.

Marginal tax rateATO resident rates including the Medicare levy, for the tax year you select. Settled law.
The 12 May 2026 boundaryContracts entered from 7:30pm AEST 12 May 2026 are captured by the proposed reform. This tool treats any contract dated 12 May 2026 as grandfathered (the investor-favourable side); confirm the exact exchange time with your conveyancer.
The 1 July 2027 startThe proposed quarantining of losses begins 1 July 2027. Before then, current negative gearing rules apply to every property class.
What "loss" means hereRent minus loan interest (your loan amount times your rate) minus other property costs. A single property, in isolation.
Carry-forwardA quarantined loss is carried forward against future residential rental income or capital gains, not forfeited. This tool shows the first-year snapshot only, not multi-year drawdown.
Reform statusNot yet law as at June 2026. Westpac, for one, is publicly waiting on legislation before finalising its position.

Scope gaps. This tool does not model: the capital gains tax changes on sale (removal of the 50% discount, cost-base indexation and a 30% minimum tax for post-12-May established property), which can outweigh the cashflow effect on sale; multi-year carry-forward drawdown; quantity-surveyor depreciation schedules (enter depreciation in "other property costs" if you have it); or losses offset across multiple properties.

FAQ

Frequently asked questions

What is negative gearing and how does it work in Australia?

Negative gearing is when your rental property costs (interest, rates, insurance, management and maintenance) exceed your rental income. The resulting loss is deductible against your other income at your marginal tax rate. On a $18,250 annual rental loss for an investor on a 39% marginal rate, that returns $7,118 at tax time. This is settled law under current ATO rules.

What is changing about negative gearing from 1 July 2027?

Assuming the 2026-27 Federal Budget changes are legislated as proposed, from 1 July 2027 rental losses on established residential property bought after 12 May 2026 would no longer be deductible against salary. The loss is quarantined and carried forward to offset future residential rental income or the eventual capital gain. New builds and properties held before that date keep negative gearing. This reform is not yet law.

Does the negative gearing reform apply to property I already own?

No, if you held the property before 7:30pm AEST on 12 May 2026. Contracts entered on or before that date are grandfathered, meaning full negative gearing continues. Only established residential property contracted after that moment is captured. New builds are exempt regardless of purchase date.

Will I lose my negative gearing tax benefit?

It depends on your property class. Assuming the proposed changes are legislated, established property bought after 12 May 2026 would have the loss quarantined from 1 July 2027. New builds and grandfathered holdings keep the benefit under both current law and the proposed reform. The quarantined loss is not forfeited; it carries forward against future rental income or capital gains.

Is this the same as my borrowing power changing?

No. This calculator models your personal tax cashflow, which is a different number from a lender's borrowing capacity. If your lender applies the negative-gearing add-back at your marginal rate, your borrowing capacity also moves, but those are separate calculations. FGO Finance Group can assess which lenders still apply the add-back for your property class.

Related reading

Going further

For a full breakdown of the 1 July 2027 negative gearing quarantining rule and the new CGT regime, including three worked numerical examples, read our deep-dive Negative Gearing and CGT Changes 2027. If capacity matters more right now, the borrowing power calculator models how lenders treat rental income and the negative gearing add-back across property classes. Our home loans service covers how FGO Finance Group structures investment lending across banks, non-banks and private credit.

Which property class. Which lender. We work out both.

Our job is to match you to the right banks. Serviceability and the fine print change lender to lender, so we bring clarity to whatever you are unsure about. No cost, no pressure to proceed.

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This calculator provides estimates only and is educational, not tax, financial or credit advice. It models the personal tax cashflow of a single geared residential property in isolation, not a lender's borrowing capacity or serviceability assessment. Figures that depend on the 2026-27 Budget reform assume it is legislated as proposed; the reform is not yet law and final rules may differ. The 12 May 2026 and 1 July 2027 dates reflect the Budget announcement. Confirm your position with a registered tax agent. FGO Finance Group Pty Ltd: Jonathan Chan is a Credit Representative (Credit Representative Number 559372) of Finsure Finance and Insurance Pty Ltd, Australian Credit Licence Number 384704.