Australia Rental Yield Calculator
Calculate the gross and net rental yield on your Australian investment property. Includes vacancy allowance, property management fees, all ATO-deductible expenses, negative gearing tax impact, and a live benchmark against the RBA cash rate and CPI inflation.
Enter Your Property & Rent
Enter your purchase price, acquisition costs, weekly rent, vacancy rate, and property management fee to calculate your effective annual rental income.
Add Expenses & Mortgage
Enter your annual expenses — council rates, insurance, repairs, and strata — then toggle on your loan to include ATO-deductible interest costs.
See Your Yield & Tax Impact
Instantly see your gross yield, net yield, gearing status, negative gearing tax saving, and how your property benchmarks against inflation and the RBA cash rate.
Rental Yield Calculator
Gross & Net Yield · Negative Gearing · ATO 2025-26
Property Details
Rental Income
Annual Expenses
Per the ATO, all expenses above are immediately deductible against rental income in the year incurred. Does not include depreciation or capital works (claim separately).
Loan / Mortgage — optional
Include mortgage interest costs?
Per the ATO, loan interest is fully deductible against rental income
Your Tax Details
Rental Yield Summary
Based on a purchase price of $600,000 and weekly rent of $650, your annual gross rent is $33,800.
After a 4% vacancy allowance, management fees, and operating expenses, your net rental income is $0, giving a gross yield of 0% and a net yield of 0%.
ATO — Rental Expenses Guide | ATO — Tax Rates 2025-26 | MoneySmart — Property Investment
Last verified: March 2026 | Tax rates: ATO 2025-26 (Stage 3 Tax Cuts)
Cash Flow Breakdown
Cash flow shows the actual money received and paid each period from your rental property. A positive cash flow means the property is positively geared — income exceeds expenses. A negative cash flow means it is negatively geared — expenses exceed income.
Where Your Rent Goes (Annual)
Your property is positively geared — rental income exceeds all expenses. You will pay additional income tax on the net rental income at your marginal rate.
When you sell the property, any capital gain is subject to CGT — separate from rental income. Use our CGT Calculator to model the sale, or our Income Tax Calculator for your full income tax picture including rental income.
Tax Impact on Rental Income
According to the ATO, rental income is assessed as ordinary income in the year received and taxed at your marginal rate. All allowable expenses reduce your taxable rental income. If expenses exceed income (negatively geared), the loss reduces your total assessable income.
ATO 2025-26 Marginal Tax Rates (applied to net rental income)
| Taxable Income (incl. net rental) | Rate |
|---|---|
| $0 – $18,200 | 0% |
| $18,201 – $45,000 | 16% |
| $45,001 – $135,000 | 30% |
| $135,001 – $190,000 | 37% |
| $190,001+ | 45% |
Medicare Levy (2%) not included. Source: ATO — Individual Income Tax Rates
Yield Benchmark
Compare your net rental yield against official Australian benchmarks — the ABS CPI inflation rate and the RBA cash rate. A yield above both benchmarks indicates the property is delivering a positive real return before income tax.
Yield Comparison
ABS CPI — December 2025 (3.80% annual) | RBA Cash Rate — March 2026 (4.10%) | MoneySmart — Property Investment
Last verified: March 2026
For educational purposes only. This calculator provides estimates based on ATO 2025-26 individual income tax rates. It does not account for depreciation deductions, capital works allowances, land tax, GST, or state-specific levies. Tax treatment of expenses may vary depending on whether your property is available for rent on a full-time or part-time basis.
Loan interest calculations assume the full loan amount is used to purchase the investment property. Only the interest component is deductible per the ATO — principal repayments are not. Always consult a registered tax agent or financial adviser for advice specific to your circumstances.
Rental Yield Formulas
How gross yield, net yield, and after-tax yield are calculated
Annual rent as a percentage of the purchase price — before any expenses. Quick to calculate but not a reliable measure of real return.
Annual Rent = Weekly Rent × 52
Annual rent after all expenses as a percentage of purchase price. The most accurate measure of investment return from rental income alone.
Net Income = Effective Rent − All Deductible Expenses
The actual rent expected after accounting for periods when the property is vacant between tenants.
Typical AU residential vacancy rate: 2–5% p.a.
Net yield adjusted for the income tax impact on net rental income (positive gearing) or tax saving from the rental loss (negative gearing).
After-Tax Income = Net Rental Income ± Income Tax Impact
Example: A $600,000 property renting for $650/week has a gross yield of 5.63%. After a 4% vacancy, 8% management fee, and $6,500 in other expenses, the net yield drops to approximately 3.6%. Always compare net yield — not gross — when evaluating investment performance.
Positive vs Negative Gearing
ATO rules on rental property gearing and tax treatment
According to the ATO, a rental property is positively geared when income exceeds expenses, and negatively geared when deductible expenses exceed income. Both are assessed under ordinary income tax — the 50% CGT discount does not apply to rental income.
✓ Positively Geared
- ✓Rental income exceeds total expenses
- ✓Property generates positive annual cash flow
- ✓Net rental income taxed at your marginal rate
- ✓No special tax concession — taxed as ordinary income
- ✓Common in high-yield regional markets
✗ Negatively Geared
- –Expenses exceed rental income
- –Rental loss offsets other income (salary, wages)
- –Reduces total assessable income → tax saving
- –Excess losses carry forward to next income year
- –Relies on capital growth to offset ongoing loss
Example (Negative Gearing): A property with $28,000 effective annual rent and $36,000 in total expenses (including interest) is negatively geared by $8,000. At the 37% marginal rate, the tax saving is approximately $2,960 per year — reducing the real cost of the shortfall. Source: ATO — Rental Expenses
Source: ATO — How to Claim Rental Expenses | ATO — Rental Properties Guide 2025
ATO-Deductible Rental Expenses
What you can and cannot claim — per ATO Rental Properties Guide 2025
According to the ATO Rental Properties Guide 2025, rental expenses are deductible only to the extent they are incurred for the purpose of producing rental income. Expenses must be apportioned if the property was not available for rent for the full year or was used for private purposes.
| Expense | Deductible? | Notes |
|---|---|---|
| Loan Interest | Yes — Now | Interest portion only — not principal repayments. Deductible from when the property is available for rent. |
| Property Management Fees | Yes — Now | Commission charged by agent (typically 7–10% of rent). Letting fees for new tenants also deductible. |
| Council Rates | Yes — Now | Apportion if not available for rent for full year. |
| Water Rates | Yes — Now | Water supply charges paid by landlord. Tenants generally pay usage. |
| Landlord Insurance | Yes — Now | Insurance premiums for building and landlord protection policies. |
| Repairs & Maintenance | Yes — Now | Repairs to restore existing condition. Improvements are capital and must be depreciated. |
| Strata / Body Corporate | Yes — Now | Administration and maintenance levies. Capital works fund levies are deductible over time. |
| Depreciation (Div 43 & Div 40) | Yes — Over Time | Capital works (2.5% p.a.) and plant & equipment decline in value. Not included in this calculator. |
| Purchase Price | No | Capital in nature — forms part of the CGT cost base on sale, not deductible against rental income. |
| Stamp Duty / Legal Fees (purchase) | No | Added to CGT cost base. Not immediately deductible against rental income. |
| Loan Principal Repayments | No | Only interest is deductible — not the capital component of repayments. |
Source: ATO — How to Claim Rental Expenses | ATO — Rental Properties Guide 2025
ATO 2025-26 Individual Income Tax Rates
Applied to net rental income — Stage 3 Tax Cuts effective 1 July 2024
Rental income and losses are assessed under ordinary income tax. Your net rental income (or loss) is added to (or deducted from) your other assessable income, and the combined figure is taxed at the applicable marginal rate. Per the ATO, the following rates apply for 2025-26:
| Taxable Income (incl. net rental income) | Tax Rate | Tax on This Bracket |
|---|---|---|
| $0 – $18,200 | 0% | Nil |
| $18,201 – $45,000 | 16% | 16c for each $1 over $18,200 |
| $45,001 – $135,000 | 30% | $4,288 + 30c for each $1 over $45,000 |
| $135,001 – $190,000 | 37% | $31,288 + 37c for each $1 over $135,000 |
| $190,001 and over | 45% | $51,638 + 45c for each $1 over $190,000 |
Medicare Levy (2%) assessed separately. The 50% CGT discount does not apply to rental income — only to capital gains on sale. Source: ATO — Individual Income Tax Rates
Only the portion of income or loss that falls within each bracket is taxed at that rate. For negative gearing, the tax saving equals the rental loss multiplied by your marginal rate on the portion of income the loss offsets — not your average rate.
Australian Rental Yield Benchmarks
Official ABS CPI and RBA cash rate as at March 2026
Two official benchmarks are used to assess whether a property's yield represents a real return — the ABS CPI inflation rate (the minimum needed to preserve purchasing power) and the RBA cash rate (the risk-free return available in a savings account).
| Benchmark | Rate (p.a.) | Source | What it means for yield |
|---|---|---|---|
| ABS CPI Inflation | 3.80% | ABS Dec 2025 | Net yield below this = real purchasing power lost |
| RBA Cash Rate | 4.10% | RBA Mar 2026 | Net yield below this = worse than a high-interest savings account |
Benchmark States — How the Calculator Rates Your Yield
| State | Condition | Meaning |
|---|---|---|
| Beats Both | Net yield ≥ 4.10% | Property delivers a real return above both inflation and the risk-free cash rate |
| Beats Inflation | Net yield ≥ 3.80% but < 4.10% | Purchasing power preserved, but below what cash earns — relying on capital growth |
| Below Inflation | Net yield > 0 but < 3.80% | Real-terms shortfall — rental income does not cover the cost of money over time |
| Negative | Net income < 0 | Negatively geared — expenses exceed income. Tax benefit partially offsets the loss |
Benchmark comparisons in this calculator use net yield (pre-income tax), which is consistent with how interest rates and inflation are quoted. To assess true after-tax performance, see the After-Tax Net Yield shown in the Full Summary tab — it will always be lower than the pre-tax net yield for positively geared properties, and higher (due to the tax benefit) for negatively geared ones.
Frequently Asked Questions
Everything you need to know about calculating your rental yield in Australia.
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