How the calculator works
A property deal has three stages, and most online calculators only show one of them. This one runs all three, year by year, for up to 30 years.
Buying. The purchase price, stamp duty for your state and property type, legal and conveyancing fees, building and pest or commercial due diligence, and the costs of setting up the loan. The price less the loan is your deposit. The deposit plus every one of those costs is the cash you actually need, and it is the number the return is measured against.
Holding. Rent, less the weeks it sits empty, less council rates, water, strata, insurance, land tax, the property manager, letting fees, repairs and the small costs that add up. What is left is net operating income. Take away interest and principal repayments and you have the cash flow before tax. Then the calculator works out the tax on the rental result for an individual, a company or a family trust, including depreciation, borrowing expenses and the 2026 negative gearing rules, to get the cash flow after tax.
Selling. The property is sold at the end of the hold at the price the growth rate implies. Selling costs come off, the loan is repaid, and capital gains tax is estimated under the rules that apply from 1 July 2027. Add the after-tax rent-side cash flows over the years and you have the profit, the annual return on your cash (an internal rate of return), and how many dollars came back for every dollar you put in.
Where the default numbers come from
Every input starts at a typical 2026 figure so the calculator gives a sensible answer straight away. None of them is your number. Replace each one with a quote, a rates notice or a lease the moment you have it.
| Input | Default | Why |
|---|---|---|
| Interest rate | 6.50% / 7.25% | Residential: a competitive investor rate, below the 7.22% database average. Commercial: banks lend for investment from about 6.50% at 65% or less of value |
| Loan size | 80% / 65% | Residential investors commonly borrow 80% without mortgage insurance; banks cap most commercial loans at 65–70% |
| Management fee | 5.8–8.7% | Set by state from the 2026 averages; commercial defaults to 4% of rent |
| Letting fees | 1.4% / 3.0% | About 1.4 weeks’ rent every two years for a home; commercial leasing fees spread over a typical lease |
| Insurance | $2,000 / $3,500 | Canstar puts average landlord insurance at $2,640 for a house and $432 for a unit (March 2026). Units rely on the strata policy for the building |
| Council rates | $2,000 / $4,500 | Capital-city rates typically run $1,500–$3,500 a year for a home before waste charges |
| Legal and conveyancing | $2,200 / $6,000 | Conveyancers charge roughly $500–$3,000 and solicitors $1,500–$3,200+, plus $300–$800 of searches and registration |
| Vacancy | 2 wks / 6 wks | Homes re-let quickly in a tight market; commercial space can sit empty for months, so this is the setting to stress-test |
| Capital growth | 5.0% / 3.5% | A middle-of-the-road long-run assumption. Test 3% and 7% before you rely on 5% |
| Land value | 60% / 45% / 50% | Share of the price for an established home, new build and commercial building. Land tax is charged on land, not the price |
Stamp duty and land tax are not defaults. They are calculated from the 2026–27 rates for the state you pick, using the same engines as richer.au’s stamp duty calculator and land tax calculator. Land tax assumes this is the only land you hold in that state; if you already own property there, the real bill will be higher, because every state except the ACT adds your holdings together.
A worked example: $850,000 in Sydney
The calculator opens on an established house in New South Wales: $850,000, $650 a week rent, an 80% loan at 6.50% on principal and interest, owned by an individual on the 39% marginal rate (37% plus Medicare), held for ten years at 5% growth.
| Result | Established house | Same, as a new build | Commercial, $1.2m |
|---|---|---|---|
| Cash you need | $206,437 | $206,137 | $482,687 |
| Gross / net yield | 3.98% / 2.67% | 4.16% / 2.93% | 6.00% / 4.63% |
| Year 1, before tax | −$555/wk | −$512/wk | −$234/wk |
| Year 1, after tax | −$415/wk | −$275/wk | −$131/wk |
| Cash-flow positive | Not in 10 yrs | Not in 10 yrs | Year 8 |
| Return a year, after tax | 7.1% | 8.7% | 6.9% |
| Profit after tax, 10 yrs | $304,279 | $337,500 | $475,165 |
The house costs $555 a week to hold in its first year. Rent covers the running costs comfortably — net operating income is $22,735 — but not the $51,577 of loan repayments. To break even before tax in year one the rent would need to be about $1,307 a week, double what it earns. That gap is what the investor is paying for the growth.
And it is the growth that decides the result. The same house returns 7.1% a year after tax at 5% growth, 2.4% at 3%, and 10.0% at 7%. With no growth at all, ten years of holding costs and the round trip of stamp duty and selling costs leave the owner with almost nothing back: a return of −8.6% a year.
| After-tax return a year | 3% growth | 5% growth | 7% growth |
|---|---|---|---|
| 5.50% interest | 4.2% | 8.2% | 11.0% |
| 6.50% interest | 2.4% | 7.1% | 10.0% |
| 7.50% interest | 0.5% | 5.9% | 9.0% |
Read the table across, not down. Two points of growth move the return by three to five points; one point on the interest rate moves it by one to two. That is why a negatively geared property is, in substance, a leveraged bet on capital growth paid for weekly out of your salary — and why the weekly figure matters as much as the return. If you cannot comfortably carry $555 a week for years, including through a rate rise, the 7.1% is not yours to earn.
The return comes from growth. The risk comes from the weekly cost of waiting for it.
Change only the state and the same house returns between 5.6% (ACT) and 7.1% (NSW). The ACT charges land tax on every rental property with no threshold — $6,302 in year one on $510,000 of land — and Victoria’s stamp duty on $850,000 is $46,070 against $32,437 in NSW. The calculator’s state table runs the comparison for whatever you enter.
Residential vs commercial: what changes
Switch the property type to commercial and the defaults change with it, because almost every line of the deal works differently.
| Residential | Commercial | |
|---|---|---|
| Typical gross yield | 3.5% houses, 4.6% units (Aug 2026) | About 4.2% for Sydney and Melbourne industrial to 7.9% for Brisbane retail (June 2026) |
| Who pays outgoings | The owner, all of them | Usually the tenant on a net lease — rates, insurance, often land tax |
| Lease length | 6–12 months | 3–10 years, with fixed or CPI increases |
| Vacancy risk | Weeks | Months, plus incentives and fit-out to secure a new tenant |
| Loan | Up to 80–90%, from about 6.0% | 65–70% at a bank, from about 6.50% for investment |
| Stamp duty | Full scale, plus foreign surcharges | None in SA; none in the ACT to $2.1m; otherwise the general scale |
| Land tax | Usually above a threshold | Same scales; none in the ACT. Victorian commercial land bought since July 2024 later moves to a 1% annual tax on site value (not modelled) |
| 2026 negative gearing limit | Applies to established homes bought after 12 May 2026 | Does not apply |
| GST | Input-taxed, none on rent | Charged on rent; a purchase is usually GST-free as a going concern |
In the worked example the commercial property earns twice the yield of the house, so it costs far less to hold and turns positive in year eight. It still returns less on the cash put in, because it needs more than twice the cash — a 35% deposit against 20% — and the default growth rate is lower. The two things that decide a commercial deal are the lease and the vacancy assumption. Set vacancy to 12 or 26 weeks to see what a slow re-leasing does, and set outgoings recovered to zero to see what a gross lease costs you.
The calculator works in GST-exclusive figures. A tenanted commercial property is normally sold GST-free as a going concern, and an investor registered for GST collects GST on the rent and claims it back on costs, so it washes through. If the sale is not a going concern — vacant premises, for example — 10% GST can be added to the price. Check the contract before you rely on any of these numbers.
Tax in 2026: the two changes built in
Two changes announced in the 2026–27 Budget alter the after-tax result, and the calculator models both.
Negative gearing on established homes. For established residential property bought after 7:30pm AEST on 12 May 2026, rental losses from 1 July 2027 can no longer be deducted against wages or other income. They are carried forward and can only be used against rental income and rental capital gains. New builds, and property held before the cut-off, keep the old treatment. Commercial property is not affected. The calculator applies the limit only where it bites: an individual buying an established home. The loss is not destroyed, it is deferred — in the worked example, the carried-forward losses are used up against the capital gain when the house is sold.
Capital gains tax from 1 July 2027. The 50% CGT discount is replaced by indexation of the cost base to inflation, with a minimum tax of 30% on the gain, for individuals, partnerships and trusts. Growth to 1 July 2027 keeps the discount. The calculator splits the gain at that date, discounts the early part, indexes the rest by the CPI rate you set and taxes it at the higher of your marginal rate and 30%. New builds can elect to keep the 50% discount instead, and the calculator picks whichever gives the lower tax.
It treats a trust as distributing its profits at the marginal rate you choose, and keeps its losses inside the trust. It taxes a company at 30% with no discount or indexation. It does not model other property you own, other capital losses, the lower 14% bottom tax rate from July 2027, Division 7A, or land tax thresholds that rise with indexation. Depreciation is a single annual figure that reduces your cost base on sale. Get a quantity surveyor’s schedule and an accountant’s advice before you commit.
The effect is easy to see. Set the worked example to “New build” without changing anything else and the after-tax return rises from 7.1% to 7.7%, and the year-one after-tax cost falls from $415 to $368 a week, purely because the losses keep reducing wage tax. The real new build in the table does better again, at 8.7%, because its depreciation is higher. That difference is the price of the 2026 rule on an established home.
Reading the result
A feasibility calculator is only as useful as the questions you ask of it. Four numbers carry most of the answer.
Cash you need. Deposit plus stamp duty plus every buying cost. If this uses every dollar you have, the deal fails the first test before the numbers start — there is nothing left for a vacancy, a roof or a rate rise.
The weekly cost in year one. Before and after tax. This is the number you live with. Put it next to your budget and ask whether you could carry it for five years, and for five years at one percentage point higher. The sensitivity table shows the return; your pay slip decides whether you get to collect it.
The interest-rate matrix. Under the results, the cash-flow projector runs the same deal at seven interest rates, from two points below your rate to two points above, and shows the cash flow in each year of the hold — per week or per year, before or after tax — with the total over the hold, the year it turns positive and the return. Read down a column to see what a rate move does to that year. Read along a row to see how rent growth closes the gap. It also shows the interest rate up to which the rent covers every holding cost and the interest, and what each extra point costs you a week. Tap a row to make that rate your base case.
The year it turns positive. Rents grow and the loan does not, so most leveraged property eventually pays its own way. A deal that turns positive in year four is a very different proposition to one that never does inside a ten-year hold.
The after-tax return. This is the annual return on your own cash, after all costs, tax and the sale. Compare it with what the same cash would earn elsewhere at similar risk, and remember it rests on the growth assumption. A deal that only works at 7% growth is a deal that needs things to go right.
Buy the property that still works when the growth rate is ordinary. That is how investors stay Richer through the cycle, not just in the good years.
Add one point to the interest rate. Cut growth to 3%. Double the vacancy. Hold for five years instead of ten. For commercial, set outgoings recovered to zero. If the deal survives all five, it is worth taking to a broker, an accountant and a solicitor.
Frequently asked questions
What is a good net rental yield in Australia?
Net yield is rent after vacancy and running costs, before interest, as a share of the price. With national gross yields at 3.79% in August 2026, a residential net yield of 2.5–3% is ordinary and anything above 4% is strong. Commercial property usually nets 4–6%. A yield well below your interest rate means the property will be negatively geared until rents catch up.
How much cash do I need to buy an investment property?
The deposit plus every buying cost. On an $850,000 established house in NSW with an 80% loan, that is $170,000 of deposit, $32,437 of stamp duty and about $4,000 of legal, inspection and loan costs — $206,437. The calculator shows the figure for your state, price and loan size.
Can I still negatively gear an investment property in 2026?
Yes, with a limit. Established residential property bought after 7:30pm AEST on 12 May 2026 can only offset its losses against rental income and rental capital gains from 1 July 2027. New builds, property bought before the cut-off and commercial property keep full negative gearing. The calculator applies the rule automatically when you choose an established home and buy as an individual.
What capital growth rate should I use?
Run three: a low case of about 3%, a central case of about 5%, and a high case of about 7%. National values rose 2.7% over the year to August 2026 and are 3.6% below their March peak, so recent growth is a poor guide. If the deal only works in the high case, treat it as a speculation.
Does the calculator include GST on commercial property?
No. It works in GST-exclusive figures on the assumption that the purchase is GST-free as a going concern and that you are registered for GST, so GST on rent and costs passes through. A purchase that is not a going concern can attract 10% GST on the price.
Why does the state make so much difference?
Stamp duty and land tax are state taxes, and both vary widely. On the worked example, duty ranges from $28,100 in the ACT to $46,070 in Victoria, and year-one land tax from nil in NSW, Queensland, SA and the NT to $6,302 in the ACT. Holding in a family trust can change the land tax picture completely: NSW gives discretionary trusts no threshold at all.
Sources
Figures checked 29 September 2026. Rates, thresholds and market data change; confirm each against the source before acting.
- Reserve Bank of Australia, cash rate target and 2026 decisions — rba.gov.au
- Finder, average investment home loan rates, 28 September 2026 — finder.com.au
- Cotality Home Value Index, August 2026: values, yields and rents, via Property Investment Professionals
- Local Agent Finder, property management fees by state, 2026 — localagentfinder.com.au
- Canstar, landlord insurance costs, March 2026 — canstar.com.au
- Mozo, conveyancing costs in 2026 — mozo.com.au
- Landmark Valuations, council rates by capital city 2025–26 — landmark-valuations.com.au
- Aurelius Private, commercial property loan rates 2026 — aureliusprivate.com.au
- realcommercial.com.au Commercial Yield Report, June 2026, via Elite Agent
- 2026–27 Budget negative gearing and CGT measures; the CGT change is enacted by the Treasury Laws Amendment (Tax Reform No. 1) Act 2026 — see richer.au’s negative gearing explainer
- State revenue offices: stamp duty and land tax rates 2026–27 — see richer.au’s stamp duty and land tax calculators for each source
Keep reading
James Zhang is an Australian investor and company director, with interests spanning residential and commercial property, shares, ETFs, commodities and private businesses. More about James.
About these figures. The calculator is a model, not a forecast. Its defaults are typical figures checked on 29 September 2026, stamp duty and land tax use the 2026–27 rates of each jurisdiction, and the tax treatment is simplified. Interest rates, rents, growth, tax law and your own circumstances will differ. This is general information, not financial, tax or legal advice, and it does not take your objectives or situation into account. Get advice before acting.