Investment Property Calculator: Cash Flow vs the Taxable Result

August 23, 2026 3 Min Read

An investment property calculator should show you two different numbers, not one. Here’s the plain formula for both cash flow and the taxable result, plus the current tax rates to use for 2026-27.

Quick Answer: Investment Property Calculator

Cash flow and the taxable rental result are not the same number. Cash flow equals rent minus your mortgage, rates, insurance, management fees, and maintenance. The taxable rental result also subtracts depreciation, which isn’t a cash cost. A property can look negatively geared for tax purposes while your actual cash flow sits closer to break-even. That’s because depreciation lowers your taxable result without costing you anything each month.

The Cash Flow Formula

Start with your annual rent. This is the actual income the property brings in before any costs come out.
Subtract your real out-of-pocket costs. Mortgage repayments, council rates, insurance, property management fees, and maintenance all count here.
What’s left is your cash flow. A positive number means the property pays for itself and more. A negative number means you’re topping it up from your own pocket.
This is the number that affects your day-to-day budget. It’s what actually leaves or enters your bank account, regardless of what your tax return shows.

The Taxable Rental Result Formula

Start the same way, with rent minus deductible expenses. Interest, rates, insurance, management fees, repairs, and similar costs are all deductible.
Then subtract depreciation, a non-cash deduction. Building depreciation runs at 2.5% a year on eligible construction costs. Fixtures and appliances depreciate under their own separate schedule.
This gives you the taxable result, a different number to cash flow. Depreciation lowers your taxable income without ever leaving your bank account.
A property can be cash-flow positive and tax-negative at the same time. Or the reverse. These two numbers often don’t match, and that surprises a lot of new investors.

Working Out the Tax Benefit

Multiply your taxable loss by your marginal tax rate. A $10,000 loss at the 30% bracket returns roughly $3,000 as a tax benefit.
Use current 2026-27 tax rates for an accurate figure. The brackets are 30% from $45,001 to $135,000, 37% from $135,001 to $190,000, and 45% above that.
Some online calculators still use old tax-year figures. One ranking tool was found using 2023-24 tax rates well into 2026. That can throw your real benefit off.
The tax benefit lowers your loss. It doesn’t erase it. Even after the refund, you’re still out of pocket for the after-tax part of any cash shortfall.

A Worked Example Bringing It Together

Say the property brings in $27,500 a year in rent. Real cash costs, excluding depreciation, come to $32,863.
That’s a cash flow shortfall of $5,363 for the year. This is the actual amount you’d need to cover from your own income.
Add $4,000 of depreciation, and the taxable loss grows to $9,363. At a 37% marginal rate, that returns roughly $3,464 in tax benefit.
After the tax benefit, the real out-of-pocket cost drops to about $1,899. That’s the gap between the cash shortfall and what the tax refund actually covers.

FAQ: Investment Property Calculator

How do I calculate investment property cash flow?
Take your annual rent and subtract mortgage repayments, rates, insurance, management fees, and maintenance. What’s left, positive or negative, is your cash flow.

How is negative gearing tax benefit calculated?
Multiply your taxable rental loss by your marginal tax rate. For 2026-27, common brackets are 30%, 37%, and 45%, depending on your total taxable income.

Does depreciation affect my investment property tax result?
Yes, significantly. Building depreciation and depreciation on fixtures reduce your taxable rental result without costing you anything in cash, which is why your tax result and your cash flow are often different numbers.

Can a property have different cash flow and tax results?
Yes. A property can be close to cash-flow neutral while still showing a tax loss, because depreciation lowers the taxable result without being an actual cash cost.

What tax rates should I use for a negative gearing calculation?
Use the current financial year’s rates. For 2026-27, the relevant brackets are 30% from $45,001 to $135,000, 37% from $135,001 to $190,000, and 45% above that.