Sell Now vs Rent It Out Calculator NZ 2026/27

Quick answer: Neither path wins automatically. On the worked example below, a $770,000.00 home with a $380,000.00 mortgage sold today nets $359,335.00, which grows to $506,877.51 after ten years at 3.5% a year. Kept as a rental at $600.00 a week with 2.0% capital growth, the same house is worth $510,060.89 net after ten years, and the two paths cross over in year 8. Change capital growth to 4.0% and renting wins by $197,405.68. Change it to 0% and selling wins by $159,624.73. Your growth assumption is doing most of the work, so enter your own numbers below and test it both ways.

This calculator handles the fork almost every New Zealand homeowner reaches at some point: you are moving out of a house you own, and you have to decide whether to sell it or keep it and rent it out. It puts a dollar value on both paths at the same future date so they can honestly be compared. The sell-now side starts with your likely sale price, subtracts the real estate commission and the 15% GST charged on it, subtracts marketing, legal and other selling costs, subtracts the mortgage your lawyer discharges on settlement, and then compounds what is left at an after-tax investment return you choose. The keep-and-rent side runs the property year by year: rent collected after vacancy, less property management plus GST, rates, insurance, maintenance and mortgage interest, with 100% interest deductibility and residential loss ring-fencing applied to the tax, then adds the property's projected value at the end of your horizon less the commission, GST and selling costs you would still pay then and the mortgage still owing. The result is two net positions and, where one exists, the crossover year when the trailing option overtakes the leading one. It updates instantly as you type. This is general information, not tax advice.

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Updated July 2026  Current rates and legislation applied.

Verification & Methodology

Interest deductibility: 100% of interest on a residential rental is deductible from 1 April 2025, per Inland Revenue, residential property interest limitation rules ("From 1 April 2025 you can claim 100% of the interest you incur"; it was 80% from 1 April 2024 to 31 March 2025).
Loss ring-fencing: residential rental losses cannot be offset against salary, wages or business income. The calculator carries a loss forward and offsets it against later rental profit before charging tax. Source: Inland Revenue, ring-fencing of residential rental deductions, in force from the 2019 to 2020 income year.
Bright-line test: 2 years for residential property sold on or after 1 July 2024, per Inland Revenue, the bright-line property rule. Main home exclusion requires the dwelling to have been your main home for more than 50% of the bright-line period and to occupy more than 50% of the land. The calculator flags the risk; it does not calculate the tax, because that needs your original purchase price and improvement costs.
Income tax rates offered: 10.5%, 17.5%, 30%, 33% and 39%, the 2026/27 personal marginal rates at thresholds of $15,600.00, $53,500.00, $78,100.00 and $180,000.00.
GST: 15%. Applied to real estate commission and to property management fees. Residential rent is an exempt supply, so a residential landlord cannot claim that GST back, which is why the management fee is grossed up here.
Commission structures: read from our maintained New Zealand commission rate file, last researched 27 July 2026. Every agency carries a source flag shown next to its name: published means taken from the agency's own rate card, site means taken from the agency's website, and indicative means a typical New Zealand structure used as a placeholder. Ten of the twelve agencies are indicative, not published rate cards. Commission is always quoted exclusive of GST and marketing is charged separately. Every rate in New Zealand is negotiable, so verify with the office.
Investment return default: 3.5% a year, the Financial Markets Authority projection assumption for a balanced fund, net of fees and after tax at a 28% prescribed investor rate. Defensive or conservative is 2.5%, growth 4.5% and aggressive 5.5%.
Market context used for the defaults: the national median residential sale price was $770,000.00 in June 2026, up 0.7% year on year, with a national median of 48 days to sell. Source: Real Estate Institute of New Zealand monthly data, released 15 July 2026.
Inflation default: 2.0% a year for rent and running costs, the midpoint of the Reserve Bank of New Zealand's 1% to 3% inflation target band.
Council rates default: $3,000.00 is our indicative regional average. Indicative 2026 averages from our maintained property data file: Auckland $4,500.00, Wellington $4,200.00, Christchurch $3,200.00, Hamilton $3,400.00, Tauranga $3,900.00, Dunedin $3,500.00. Use your own rates notice, which is the only figure that is actually right for your property.
Editable estimates, not official figures: insurance, maintenance, marketing, legal fees and the one-off cost of getting the house rental-ready are all defaults you should replace with your own quotes. Maintenance is commonly budgeted at roughly 0.5% to 1% of property value a year as an industry rule of thumb, not an official rate. Property management fees commonly run 7% to 9% of rent collected plus GST across the New Zealand market, with letting and inspection fees charged separately.
Not modelled here: principal repayments (the loan is treated as interest only at a constant balance), chattels depreciation, an early repayment or break fee on a fixed loan, body corporate levies, letting fees on each new tenancy, bright-line or other land tax on either sale, the tax you would pay on investment income above the assumed after-tax return, and any change in your own borrowing capacity from carrying the debt.
Last verified: 27 July 2026, against current Inland Revenue guidance, Tenancy Services guidance and the maintained NZ commission rate file.
Source data: Inland Revenue, interest limitation rules, Inland Revenue, the bright-line property rule, Tenancy Services, healthy homes standards and Tenancy Services, ending a periodic tenancy.

Why This Decision Is Harder Than It Looks

Selling and renting are not simply two ways of holding the same asset. Selling converts leveraged property equity into unleveraged cash. Renting keeps the leverage. That single difference explains most of the arguments people have about this decision. If your house is worth $770,000.00 and you owe $380,000.00, a 3% rise in the property adds about $23,100.00 to your wealth, which is roughly 6.4% of your equity. That is why property looks so compelling in a rising market and so punishing in a flat one. The same leverage works in reverse, and it sits alongside a second, quieter cost: your wealth stays concentrated in one undiversified asset in one suburb, with one tenant, one roof and one interest rate.

How the Two Paths Are Valued Here

To compare fairly, both paths have to be measured as cash in hand at the same date. The sell-now path is easy: take the sale price, subtract commission and the 15% GST on it, subtract marketing and legal costs, subtract the mortgage, and compound what is left at your chosen after-tax return. The rent path is harder, because the wealth sits in an illiquid asset. This calculator values it by assuming you sell at the end of the horizon, so the future commission, GST and selling costs are subtracted along with the mortgage still owing. That is deliberate and even-handed. Selling costs do not vanish because you delayed the sale; they are simply charged on a larger price later. If you genuinely never intend to sell, add the year-end selling costs back mentally, and remember the trade-off is that the equity stays locked up.

The Rental Cashflow, Year by Year

Each year the calculator takes the annual rent, reduces it for your vacancy allowance, and then subtracts property management plus GST, rates, insurance, maintenance and mortgage interest. Rent and running costs are inflated at your chosen rate. Interest is charged on a constant balance, which is the interest-only assumption; a principal and interest loan would move money out of your pocket each year and into a smaller debt at the end, which lands in a broadly similar place but with less cash along the way. The resulting figure is both your cash position and your taxable rental result, because every one of those costs is deductible and residential buildings depreciate at 0%. Surpluses are compounded at the same return used on the sell side, and deficits accumulate at that rate too, on the basis that money you tip in is money you could not invest elsewhere.

Interest Deductibility, Ring-Fencing and the Bright-Line Test

Three New Zealand tax rules shape the rental side, and it is worth being precise about all three. First, interest deductibility was restored in full: Inland Revenue states that from 1 April 2025 you can claim 100% of the interest you incur on a residential rental property, up from 80% in the year to 31 March 2025. That change materially improves the rental case compared with the position a few years ago. Second, rental income is taxable and rental losses are ring-fenced, so a loss cannot be used against your salary. It is carried forward and used against future residential property income, which is why this calculator often shows several years of no tax followed by tax starting once the accumulated losses are used up. Third, the bright-line test is 2 years for residential property sold on or after 1 July 2024, measured from the date you acquired the property. Most people moving out of a home they have owned for years are already clear of it. If you are not, the main home exclusion only helps where the dwelling was your main home for more than 50% of the bright-line period, so renting it out for the bulk of a short ownership can convert a tax-free sale into a taxable one. Separate land rules, including the intention test, can apply regardless of the 2 year window. This page is general information and not tax advice.

The Practical Costs People Underestimate

Vacancy is the first. Two weeks a year is a common allowance, and it costs more than most people expect because letting fees usually land in the same year. Compliance is the second: all private rentals have had to meet the healthy homes standards for heating, insulation, ventilation, moisture and draught stopping since 1 July 2025, and a home that was perfectly comfortable for its owner may still need work. Insurance is the third, since landlord cover generally costs more than owner-occupier cover. Property management is the fourth: fees commonly run 7% to 9% of the rent collected plus GST, and because residential rent is a GST-exempt supply you cannot claim that GST back, so an 8% fee costs you 9.2%. Finally, exiting is slower than selling now. Under the rules in force since 30 January 2025 you generally need to give 90 days' notice to end a periodic tenancy with no reason given, or 42 days once a sale is unconditional with vacant possession required, and the national median time to sell was 48 days in June 2026.

A Fully Worked New Zealand Example

Aroha is moving to Christchurch for work and owns a house currently worth $770,000.00, the June 2026 national median, with $380,000.00 still owing. Her marginal tax rate is 33%.

If she sells now. At a negotiated 3.0% commission the fee is $23,100.00, plus 15% GST of $3,465.00. Marketing, legal and other selling costs come to $4,100.00. Her lawyer repays the $380,000.00 mortgage on settlement. Net sale proceeds are $770,000.00 less $23,100.00 less $3,465.00 less $4,100.00 less $380,000.00, which is $359,335.00. Invested in a balanced fund at the FMA assumption of 3.5% a year net of fees and after tax, that becomes $359,335.00 multiplied by 1.035 to the power of 10, or $506,877.51 after ten years.

If she rents it out. At $600.00 a week the gross rent is $31,200.00, but two weeks of vacancy reduces the rent collected to $30,000.00. Property management at 8% is $2,400.00, and because she cannot claim the GST back the real cost is $2,760.00. Rates are $3,000.00, insurance $2,200.00 and maintenance $3,500.00. Interest on $380,000.00 at 5.5% is $20,900.00. Total year one costs are $32,360.00 against $30,000.00 of rent, so the property runs at a cash and tax loss of $2,360.00. That loss is ring-fenced: it does not reduce the tax on her salary, it is carried forward. Add the $2,000.00 one-off cost of getting the house rental-ready and her cash position after year one is $4,430.00 behind.

Ten years later. At 2.0% capital growth the house is worth $938,625.70. Selling then costs 3.0% commission of $28,158.77 plus GST of $4,223.82, and selling costs inflated at 2.0% of $4,997.88. The $380,000.00 mortgage is still there because the loan was interest only. Rent has grown faster than the fixed interest bill, so the property turns cash positive around year 8, but the accumulated shortfall is still $11,184.35. Her net position is $938,625.70 less $28,158.77 less $4,223.82 less $4,997.88 less $380,000.00 less $11,184.35, which is $510,060.89. She has paid no rental income tax across the ten years, because the ring-fenced losses from the early years absorb the later profits.

The verdict, and the honest caveat. Renting wins by $3,183.38 over ten years, which on figures of half a million dollars is a rounding error, not a case. Selling is actually ahead for the first seven years, and the paths cross over in year 8. Change one input and the answer changes completely: at 4.0% capital growth the rental path is worth $704,283.18 and wins by $197,405.68, while at 0% growth it is worth $347,252.77 and loses by $159,624.73. When a decision is this sensitive to a number nobody can forecast, the non-financial factors deserve equal weight.

Who This Calculator Is For

It is for anyone moving out of a home they own and choosing what to do with it: people relocating for work, couples moving in together with two houses between them, families upsizing who could keep the first house, people going overseas, and executors or family members deciding what to do with an inherited home. It suits a straightforward standalone house or unit with one mortgage. It is not built for a portfolio, a property held in a company or trust, a mixed-use or holiday home under the mixed-use asset rules, or a property you are actively subdividing or developing, all of which have their own tax treatment.

What This Calculator Assumes

• The mortgage is interest only at a constant balance, so no principal is repaid over the horizon.
• Interest on the rental is 100% deductible from 1 April 2025, and residential buildings depreciate at 0%.
• Rental losses are ring-fenced, carried forward and offset against later rental profit before any tax is charged.
• No tax is calculated on either sale. The bright-line risk is flagged, not costed, because that would need your original purchase price and improvement costs.
• The rent path is valued as if you sell at the end of the horizon, so future commission plus GST and selling costs are deducted.
• Rent, rates, insurance, maintenance and selling costs all inflate at your chosen inflation rate; capital growth is applied separately.
• Surplus rental cash is invested, and shortfalls are funded, at the same after-tax return used on the sell side.
• Results are indicative planning estimates. This is general information, not tax, legal or financial advice.