Rentvesting vs owning calculator

The same deposit is used in both scenarios. Stamp duty is paid from it first and the rest goes towards the property. The loan covers the remainder. Stamp duty for the home you live in uses owner-occupier or first home buyer rates and the investment uses investor rates.

Renting where you want to live while owning an investment property somewhere more affordable. Rent from the investment helps cover the loan.

The cash you pay each year under each option. That is loan repayments, property costs and rent paid less rent received (after 8% for management and vacancy). When buying, stamp duty and other buying costs come out of your deposit first, lenders mortgage insurance is estimated where needed and land tax is added for the investment. If you include negative gearing, your tax is worked out from your income with and without the rental loss or profit, including any depreciation, using 2026/27 rates and the Medicare levy, with your income growing each year by the rate you choose. Without negative gearing the rental loss or profit has no tax effect. Capital growth and capital gains tax only count when you include selling at the end.

Principal repayments reduce your loan so they build equity rather than being a cost like interest. Choose No to compare interest and other costs only. The principal paid on each loan is still shown in the results and the money left each month always uses your full repayments.

Stamp duty and other buying costs are paid from your deposit first and the rest goes towards the purchase. If the loan is more than 80% of the price, lenders mortgage insurance is estimated at 1.2% of the loan up to 85% LVR, 2.2% up to 90% and 3.6% up to 95%, and added to the loan. Actual premiums vary by lender, loan size and buyer type, and some first home buyers can avoid LMI through the Home Guarantee Scheme.

Your own home is generally exempt from land tax. An investment property may be charged land tax each year, depending on the state and the combined land value of your investment properties. Enter your estimate. It rises each year with the cost increase rate and is treated as tax deductible.

Buying an investment property first usually means you are no longer a first home buyer when you later buy a home to live in. If you select first home buyer, the results show the stamp duty saving you would give up.

It compares keeping your current loan and living in your home with renting your home out and renting a similar place to live. The loan repayments and property costs are the same in both. Renting out adds the rent you pay and the rent you receive and, with negative gearing on, the tax effect of the rental loss or profit. Interest on the loan is generally deductible while the property is rented, because the loan was used to buy it.

Under the ATO’s six-year rule, a former home can generally stay exempt from capital gains tax for up to six years while it is rented out, as long as you do not treat another property as your main residence. Speak with your accountant about your situation.

Stamp duty on your next purchase, returns on any cash-flow difference between the two options and your living expenses, which the amount left each month does not deduct. Interest rates and tax rates stay as they are today for the whole period. Rental losses are not carried forward to later years when negative gearing is off. Speak with your accountant about your situation.

It uses the same approach as our borrowing power calculator. That is your after-tax income less a household expense benchmark, tested at your rate plus a 3% buffer. For rentvesting, 80% of the rent received is counted as income and the rent you pay is counted as an expense. It is a guide only. Each lender assesses differently.

It assumes both properties are sold at the end of the comparison period, at the growth rate you choose. Selling costs and the remaining loan are deducted. Capital gains tax applies to the investment only and uses your income in the final year. Your own home is treated as exempt. Growth up to 1 July 2027 gets the 50% discount, using a value on that date worked out from your growth rate. Growth after that date uses the new rules. The value on 1 July 2027 is increased for inflation, which we assume is 2.5% a year, and the rest of the gain is taxed at your rate with a minimum of 30%. If the property isn't worth more than you paid by then, including stamp duty and buying costs, the new rules start from what you paid. If the investment is a new build, the calculator also works out the tax with the 50% discount on the whole gain and uses whichever is lower, because new builds keep that choice under the 2026 reform. The net position is the cash from the sale, less your deposit and everything you paid over the period, including principal. It is an estimate only.

Some situations have their own capital gains tax rules that this calculator doesn't model, including properties owned through an SMSF, the small business concessions, qualifying affordable housing and people receiving the Age Pension or other income support. Speak with your accountant about your situation.