Rental Yield & Negative Gearing Calculator
Work out an investment property's gross and net yield, its cash flow, and what negative gearing really saves you in tax.
Property and rent
Yearly costs
Loan and tax
Gross yield is a full year's rent ÷ price. Net yield is the rent you collect, less management fees and the yearly costs, ÷ price (before loan costs). Tax uses 2026–27 resident rates plus the 2% Medicare levy. Only interest is deductible, not principal repayments. Excludes land tax, capital gains and the cost of buying.
Printed from ClearCalc (clearcalc.com.au/rental-yield-calculator/). Estimates only, not financial advice.
Gross vs net rental yield
Gross yield is a year's rent divided by the price. A $750,000 property renting for $650 a week earns $33,800 a year, a gross yield of 4.5%. It's quick, but it ignores costs.
Net yield takes off vacancies, property management, rates, insurance, strata and maintenance. With two vacant weeks, a 7% management fee and $6,300 of other costs, the same property's net yield falls to about 3.2%. Net yield is the better way to compare properties, because a cheap unit with high strata fees can look great on gross yield but poor on net.
How negative gearing works
A property is negatively geared when its deductible costs (interest, management, rates, insurance, repairs and depreciation) are more than the rent. The loss reduces your other taxable income, such as your salary, so you pay less tax.
Using the example above with a $600,000 interest-only loan at 6.5% and $5,000 depreciation, the property makes a taxable loss of about $20,100. On a $120,000 salary, where the tax rate is 32% including Medicare, that cuts your tax by about $6,420. But you're still about $8,650 a year out of pocket (around $166 a week). Negative gearing softens a loss; it doesn't turn it into a profit. Investors who negatively gear are counting on capital growth when they sell, which is then taxed as a capital gain (see the CGT calculator).
Changes from 1 July 2027: under laws passed in June 2026, rental losses on established homes bought after 7:30pm on 12 May 2026 can no longer reduce your salary income from 1 July 2027. They carry forward against future property income instead. Properties held before the cut-off, and new builds that add to supply, keep negative gearing. Read the full explainer.
What you can and can't claim
- Interest on the investment loan is deductible, but principal repayments aren't. That's why a principal and interest loan shows worse cash flow without a bigger tax refund.
- Depreciation on the building (capital works, usually 2.5% a year for homes built after September 1987) and on new fittings can be claimed. A quantity surveyor's depreciation schedule tells you the amount. It's a non-cash deduction, so it boosts your refund without costing you money each year.
- Buying costs like stamp duty can't be claimed straight away. They're added to the property's cost base for capital gains tax.
Other costs to consider
Investors may also pay land tax each year, which can be large in some states. Check yours with the land tax calculator, and use the stamp duty calculator for upfront costs. Tax figures use 2026–27 resident rates; see the full tax rates.
Estimates only. Rental rules are complex. Talk to a registered tax agent or licensed financial adviser before you buy.
Frequently asked questions
What is a good rental yield in Australia?
Gross yields of 4% to 5% are typical for houses in major cities, with units and regional properties often higher. A higher yield usually means better cash flow, but sometimes slower capital growth.
How is rental yield calculated?
Gross yield = weekly rent × 52 ÷ purchase price × 100. Net yield takes away vacancies, management fees and yearly costs before dividing by the price.
Is negative gearing worth it?
Only if the property grows in value enough to make up for the yearly cash losses. The tax refund returns part of the loss, at your marginal tax rate, but you still pay the rest yourself.
Can I claim depreciation on an older property?
You can usually claim capital works (building) depreciation if the home was built after mid-September 1987. For second-hand residential properties bought after 9 May 2017, you generally can't claim depreciation on existing fittings like ovens and carpets.
Official sources used for this calculator include: Moneysmart – Personal loans, Moneysmart – Credit cards, Moneysmart – Saving. See how we calculate.
Reviewed by the ClearCalc team. Last reviewed October 2026. This calculator gives an estimate for general information only. Check important figures with the relevant government agency or a licensed professional.