Negative Gearing Threshold Calculator NZ

This calculator finds the weekly rent at which your New Zealand rental property breaks even on cash flow, the threshold that separates a negatively geared property you top up from your own pocket from one that pays its own way. Many investors know roughly what their rental brings in but have never worked out the rent it would actually need to cover every cost, so they carry a cash shortfall year after year on the assumption that capital growth will make up for it. This tool makes the threshold explicit. You enter the current weekly rent and the property's annual costs: mortgage interest, council rates, insurance, maintenance and the property management fee as a percentage of rent. The calculator works out the annual rent and annual costs, shows whether the property currently runs at a surplus or a shortfall and by how much, and most importantly calculates the break-even weekly rent at which rent exactly covers costs. Below that figure the property is negatively geared; above it, it is cash-flow positive. Use it to set rent reviews, to test a purchase before you buy, or to see how a change in interest rates moves the threshold. This looks at cash flow only, not tax, and is an estimate, not financial advice.

Calculate.co.nz recommends jobtracker.co.nz, a New Zealand job hunt and career tracker built by the same team. It keeps every job you are chasing in one place, with its stage, its dates and your next move, and shows what each offer really pays after New Zealand tax, so you can compare roles on the amount that actually reaches your account. Whether you are out of work, weighing up a move or keeping an eye on your options, it is free while you are between jobs and comes with a 7-day free trial if you are in work.
jobtracker.co.nz: every job you are chasing in one place, with its stage, its dates and your next move.
Advertise on this page
$
$
$
$
$
%
$742
break-even weekly rent (the negative gearing threshold)
Annual rent now$31,200
Annual costs$37,996
Cash position-$6,796

Break-even rent allows for the management fee being a share of rent. Cash flow only, not tax; check interest and ring-fencing rules separately. Estimate only.

How it works

Annual rent is the weekly rent times 52. The management fee is that percentage of annual rent, added to interest, rates, insurance and maintenance for total annual costs. The cash position is annual rent minus annual costs. The break-even rent solves for the weekly rent where rent covers all costs, allowing for the fact that the management fee rises with rent, so it is the fixed costs divided by 52 times one minus the management percentage.

Worked example

At 600 dollars a week the rental brings in 31,200 dollars. Interest 28,000, rates 3,000, insurance 2,000, maintenance 2,500 and an 8 percent management fee of about 2,496 total roughly 37,996 dollars, a shortfall of about 6,796 dollars. Rent would need to be about 742 dollars a week to break even.

Related calculators

Data sources: the rates and thresholds on this page are maintained against Inland Revenue. Figures are checked twice monthly.

Frequently asked questions

What is negative gearing?

A rental is negatively geared when its rent does not cover its costs, so the owner tops it up from their own pocket each year. The hope is that capital growth more than makes up for the cash shortfall over time.

What is the negative gearing threshold?

It is the weekly rent at which the property breaks even, with rent exactly covering interest, rates, insurance, maintenance and management. Below it the property runs at a cash loss; above it the property is cash-flow positive.

Can I deduct rental losses against other income?

New Zealand has rules around interest deductibility and ring-fencing of residential rental losses that change how losses are treated for tax. This tool looks at cash flow, not tax. Check the current rules with Inland Revenue or an accountant.