What happens to your numbers, step by step

1. Buying costs

Stamp duty comes from your state's current rate table. If you'll live in the home, we apply owner-occupier rates where a state has them (Victoria, Queensland and the ACT do). If you're a first home buyer, we apply that state's exemption or concession. That includes the ACT's nil duty at any price and Queensland's nil duty on new homes. Off-the-plan concessions in Victoria and WA are applied too, and foreign buyers pay their state's surcharge on top.

We then add the transfer and mortgage registration fees, which South Australia and Queensland charge on a sliding scale, plus your conveyancing and inspection costs.

If your deposit is under 20%, we estimate lenders mortgage insurance from current insurer pricing for your loan size, plus any state duty on the premium. First home buyers using the Government's 5% Deposit Scheme skip LMI entirely if the price is under the cap for their area. Brand new homes may also get a First Home Owner Grant, which we take off the cash you need.

2. The loan

We calculate repayments month by month, the way banks do. Interest-only periods switch to principal and interest over the remaining term. Each year we track how much went to interest (deductible for investors) and how much paid the loan down (not deductible, but it's your money building equity).

3. Holding the property

Rent is your weekly rent times the weeks it's let, after allowing for vacancy. Running costs include property management, letting fees, council and water rates, strata, insurance, repairs and accounting. For investors we add land tax, worked out from your land value and your state's thresholds. Rent and costs grow each year at the rates you set.

4. Tax each year

For each owner we work out their tax twice: once on their other income, and once with their share of the property's rental profit or loss. The difference is the property's tax effect. It uses the actual 2026-27 brackets (15% bottom rate), the 14% rate from July 2027, the Medicare levy, the low income tax offset and the Medicare levy surcharge if you don't have private hospital cover.

Deductions follow ATO rules. Interest and running costs are deducted in the year you pay them. Borrowing costs over $100 are spread over five years. Capital works and plant and equipment depreciation are claimed each year, with plant and equipment excluded on second-hand homes.

The 2026 negative gearing change. If you sign a contract for an established home after 12 May 2026, a rental loss still cuts your tax in 2026-27. From 1 July 2027 it doesn't: it's carried forward per owner, used first against later rental profits, then against the capital gain when you sell. New homes and anything bought before 12 May 2026 keep the old treatment.

5. Selling

At the end of your chosen holding period we take the projected value, subtract agent fees and legal costs, and pay out the loan. For investors we then work out capital gains tax for each owner:

• Sales before 1 July 2027 use the 50% discount on the whole gain.
• For later sales, growth up to 30 June 2027 keeps the discount. Growth after that is taxed in full once your cost is adjusted for inflation, with a 30% minimum tax on that part.
• New homes can choose the old discount on the whole gain instead, and we use whichever is lower.
• Carried-forward rental losses reduce the gain before any discount.
• Your own home is exempt if you live in it the whole time.

6. Your return

We line up every dollar you put in and take out (deposit and buying costs on day one, each year's after-tax cash flow, and the cash from the sale) and calculate the annual return (IRR). It's the same measure fund managers use, so you can compare a property directly with a term deposit or an index fund.

The stress test reruns everything with higher interest rates, more vacancy, lower rent and no price growth, so you can see how much room you have if things go wrong.

What we don't cover

The full analysis models individuals buying residential property. Companies, trusts, SMSFs, commercial property and pensioner duty concessions are outside it; Help to Buy and homes that were partly your main residence have their own calculators. Land tax assumes this is the only land you own in that state. And every projection is an estimate: rents, prices and rates will move.