Investment property cash flow calculator — after-tax return and IRR

Worked example

Buying a $750,000 property with a $150,000 deposit, $27,937 of stamp duty and $2,500 of other costs means $180,437 of your own money. On an interest-only loan at 6%, year one costs $36,000 in interest.

Stamp duty is worked out from the NSW general rates and land tax from the $400,000 land value you enter, grown each year with the price and applied to your total holdings in that state (below the NSW threshold in year one). Land tax is a deductible running cost, so it also reduces taxable rent.

Year-one cash flow before tax is -$11,009; the tax effect is -$5,523, giving -$5,486 after tax. From 2027–28 the default purchase (an established home contracted after 12 May 2026) has its losses quarantined, so the tax saving stops and the carried-forward amount waits for the sale.

After 10 years at 5% growth the sale uses: deemed sale at 30 June 2027 + indexation + 30% minimum. Tax on the sale is $66,278, after applying $118,747 of quarantined losses to the gain. After-tax IRR: 8.8%.

Year-one after-tax cash flow breaks even at $822 a week of rent, or an interest rate of 4.66%.

How CGT works after 1 July 2027

The Act replaces the 50% CGT discount for individuals and trusts with cost-base indexation for gains accruing from 1 July 2027. An asset you hold on 30 June 2027 is treated as sold at market value just before 1 July 2027 and reacquired (s.112-155). The gain up to that date is deferred until you actually sell and keeps the 50% discount; the gain after it is worked out on an indexed cost base.

A new Division 119 then ensures a minimum 30% rate of tax (before offsets) on post-July-2027 capital gains: if the extra income tax caused by the gain is less than 30% of it, you pay the difference. Deferred pre-2027 gains and gains on new residential dwellings are outside the minimum, and new residential dwellings keep the 50% discount (s.115-102). All of this is in the Act as made on 26 June 2026.

Indexation uses the Consumer Price Index; the calculator uses the inflation rate you enter as a projection, rounded to three decimal places like the Act's index factor. The value on 30 June 2027 is taken from the projected price path. The Act also allows an apportioning method instead of a market valuation, to be set by a later determination — not modelled.

What this calculator does not include

• Stamp duty concessions (first home, off-the-plan, pensioner) and foreign-buyer surcharges — enter your own duty figure if they apply.
• The optional apportioning method for the 30 June 2027 value.
• Borrowing costs, prepaid interest and depreciation on second-hand assets (not deductible for residential property bought since May 2017).
• Which properties count as a "new residential dwelling" is left by the Act to a ministerial determination (s.26-160(4)) that had not been made when we last checked. Results for new builds assume the property will qualify.

Questions landlords ask

Do I lose the 50% CGT discount on my existing property?

Only for growth after 30 June 2027. The gain up to then is deferred and keeps the discount when you sell; later growth is indexed for inflation and subject to the 30% minimum.

Is stamp duty deductible?

No. It forms part of the property's cost base for CGT, which reduces the gain when you sell.

Why can my after-tax cash flow get worse in 2027–28?

If you bought an established home after the 12 May 2026 cut-off, losses from 2027–28 are quarantined and no longer reduce the tax on your salary.