Investment Property Tax Calculator Australia 2026

You can claim a wide range of deductions against your rental income: loan interest (usually the largest deduction), council rates, water rates, landlord insurance, body corporate fees, property management fees, repairs and maintenance, land tax, advertising for tenants, pest control, garden maintenance, cleaning costs, and legal fees. You can also claim non-cash depreciation — capital works (the building structure) at 2.5% p.a. and plant & equipment (fixtures and fittings) under a depreciation schedule. Borrowing costs such as loan establishment fees are spread over 5 years. Keep receipts for everything.

Rental income is added to your assessable income and taxed at your marginal tax rate. If your total deductible expenses exceed your rental income, the net loss reduces your taxable income — this is negative gearing. If your rental income exceeds expenses, the net profit is added to your taxable income. You declare rental income and expenses in your tax return each year via a Rental Schedule.

ATO-approved deductions for the 2025-26 year include: (1) Loan interest on investment borrowings; (2) Council and water rates; (3) Landlord insurance; (4) Body corporate/strata fees; (5) Property management and letting fees; (6) Repairs and maintenance (not capital improvements); (7) Land tax; (8) Depreciation — Div 43 capital works (2.5% p.a. on post-1987 buildings) and Div 40 plant & equipment; (9) Advertising costs; (10) Pest control, cleaning, garden maintenance; (11) Legal fees for tenancy matters; (12) Borrowing costs spread over 5 years; (13) Travel to inspect the property is no longer deductible (removed 2017-18). Always confirm with your accountant.

Repairs restore an item to its original condition and are fully deductible in the year incurred. Capital improvements enhance the property beyond its original condition — these must be depreciated over time, not claimed immediately. For example, fixing a leaking tap is a repair (deductible now); replacing a standard kitchen with an upgraded one is a capital improvement (depreciate over time). New items installed to replace existing ones may still qualify as repairs in some cases — your accountant can advise.

Yes. There are two types: Division 43 (capital works) covers the building structure at 2.5% p.a., available on residential buildings constructed after 17 July 1985. Division 40 (plant and equipment) covers removable fixtures and fittings — carpets, appliances, blinds, hot water systems — depreciated at effective life rates. For properties purchased after 7 May 2017, Div 40 deductions are only available for brand-new assets you installed, not second-hand items that were in the property at purchase. A quantity surveyor's depreciation schedule (typically $400–$800) is usually worth getting.

A quantity surveyor's depreciation schedule is not legally required but is highly recommended for any property built after 1985. For new properties, depreciation deductions are substantial — often $5,000–$20,000+ per year for the first few years. For older properties or those purchased after 2017, the benefit may be smaller. The schedule cost ($400–$800) is itself tax deductible. Most accountants recommend getting one before lodging your first rental property tax return.

Step 1: Calculate gross rental income (weekly rent × 52, minus vacancy). Step 2: List all deductible expenses including interest, rates, insurance, management fees, maintenance, depreciation, and other costs. Step 3: Subtract total deductions from gross rental income. Step 4: If the result is negative (a loss), multiply by your marginal tax rate to find your tax refund. If positive, multiply by your marginal tax rate to find the extra tax owed. Our calculator above does all this automatically.

Use the rate that applies to your highest dollar of income for the 2025-26 year. Australian marginal rates (including Medicare levy) are: 0% (up to $18,200), 18% ($18,201–$45,000), 32% ($45,001–$135,000), 39% ($135,001–$190,000), 47% (above $190,000). Note that a negative gearing loss reduces your taxable income, so your marginal rate determines both your tax bracket and how much benefit you receive. Enter your salary in the calculator and it will auto-select your rate.