Property vs Shares Calculator Australia (2026)

The Core Principle — Apples-to-Apples Comparison

Both investors start with identical total capital (down payment + stamp duty + other costs + any offset balance). With Off-the-plan on, that holds only in total: under Saved from income and Arrives at settlement the shares side invests the deposit at signing and the rest as it arrives, on the same dates the property side pays it (see how the settlement period is modelled). Each year, the calculator forces both investors to have the same personal cash position — if property is negatively geared and needs $10K top-up, the shares investor also invests an extra $10K. If property throws off $5K net, the shares investor sells $5K of shares. PPOR fix: in Live-in (PPOR) mode, the shares investor must still live somewhere, so we also model rent for an equivalent home (same price & rental yield assumptions, grown by your rent growth rate). The shares buy/sell each year is therefore based on (-Net Prop CF) − Rent, not just -Net Prop CF. This means the only difference between the two paths is what you walk away with at exit. Offset account: the starting offset balance is in both sides’ starting capital, so in both neutrality modes it comes back to the property side at exit as part of its net proceeds (the shares side invested the same money on day one, in the portfolio it sells). The yearly contributions also come back at exit and, in both modes, the whole balance, contributions included, reduces the interest on the loan. What differs is who pays for them. Pocket-neutral (the default, like-for-like): each contribution is charged to the property side’s cash flow and the same amount is invested in shares. Consumption-neutral (forced-savings view): the contributions, like loan principal, are the owner’s saving: they are charged to neither side’s cash flow, nothing is invested in shares for them, and they stay with the property. That view is deliberately not like-for-like; it shows the ‘forced savings’ argument for property.

PPOR vs Investment Mode

Investment mode: Rental income flows in, CGT is calculated at exit, land tax applies annually. For the individual structure, CGT reflects the reform effective 1 July 2027: the 50% discount applies to the part of the gain accruing before 1 July 2027, and, for a dwelling that meets the Minister’s requirements for a “new residential dwelling” (which the Act leaves to a determination, s 26-160(4)), to the whole gain unless you choose indexation instead. For a property marked New Build this calculator takes the lower of the discount and indexation as your choice (property only; the share lots never get it), and “New Build” here is a negative-gearing definition that may not match the Minister’s requirements. Treasury’s draft requirements (not law) have two main tests: the dwelling’s certificate of occupancy must have been first issued after the 12 May 2026 announcement, and a buyer acquiring from another entity must do so within 24 months of that certificate; occupancy is not a test. Where indexation applies, for the part accruing from that date the gain is instead indexed for CPI (using the rate set in Inflation (CPI), Investor Profile) and the real gain is added, with the rest of the sale year’s net capital gain, to your other taxable income and taxed through the resident brackets, then topped up to a 30% minimum where the brackets charge less (in Flat rate mode: your entered rate or 30%, whichever is higher) — a minimum this calculator applies to every individual, which the Act does not (see Limitations). SMSF and Company structures are unaffected by this reform and keep their existing treatment (see Limitations). New builds retain traditional negative gearing — rental losses offset other income immediately (this calculator’s assumption; see Limitations). Existing/established properties follow the reform from the 2027-28 income year (1 July 2027): rental losses from that date are quarantined and can only offset future rental profits (or reduce CGT on sale); a loss before it offsets other income, and the year that straddles 1 July 2027 is split by time. Select "New Build" or "Existing" under Property Status to model the correct rule.

PPOR (Live-in) mode: You live in the property — no rental income, no land tax, and importantly no CGT on sale under the main residence exemption (Section 118-110 ITAA 1997). This makes property even more tax-advantaged vs shares, which always face CGT.

Owning costs and inflation

The ongoing costs of owning are costed year by year. Strata levies, water and the council base charge are fixed dollar amounts you enter in today’s dollars; they rise every year from today at the Inflation (CPI) rate (strata can have its own rate), so an off-the-plan wait lifts the first owned year’s costs. Insurance, maintenance and the land part of council rates follow the property’s value, and agent fees follow rent. For a New Build, maintenance can ramp up with the building’s age instead of staying flat (see Limitations). In the Monte Carlo run the same costs swing around the same CPI path, replacing the fixed escalation rather than adding to it. The Monte Carlo P50 centres on the base case but differs from it by a few percent from run to run, because the paths are random.

Debt Recycling — Is It Fair to Both Sides?

The offset account is property-specific: it reduces your interest-bearing loan balance using parked cash, lowering interest costs without selling the property. This is modelled symmetrically — the shares investor deploys the same offset balance in shares from day 0.

The debt recycling feature (property path only) converts non-deductible home loan principal into deductible investment debt — essentially using principal repayments to buy shares, making the interest tax-deductible. This is a property-specific strategy with no equivalent on the pure shares side.

The margin loan (shares path) is the shares investor's leverage tool. It directly amplifies returns (and risks). This is the shares-side equivalent of using a mortgage to buy property — available in the Shares section. Switch Margin Lending on and set the LVR above 0% to enable it. The loan is always sized from the starting capital: loan = starting capital × LVR ÷ (1 − LVR). Fixed dollar loan (the default) keeps that loan at its starting dollar amount for the whole run, so as the portfolio grows the LVR falls (on the default run a 30% starting LVR is about 26% after one year, 9% after ten and 1% after thirty). Hold LVR at the target resets the loan at every year-end, after the shares are valued, to the target LVR × the whole share portfolio: when the portfolio has grown the extra is borrowed and used to buy shares (with brokerage), and when it has fallen shares are sold to repay the loan (brokerage and CGT come out of the sale, so the loan falls by the net proceeds). It is not done in the final year, when the whole portfolio is sold anyway. In both modes the interest is deductible at your marginal rate and is paid from dividends first and then by selling shares. Re-gearing compounds leverage hard: the same inputs can swing the result by millions, and a falling market forces share sales. The lender's maximum LVR is the margin-call level: the Monte Carlo counts the share of paths with a year-end LVR above it, and the results show a warning when a run passes it. The model has no lender-specific rules, no margin-call buffer beyond that maximum, holds the margin rate constant, and the 7.5% rate is an assumption, not a quote.

Bottom line: Debt recycling gives the property side an additional tax advantage. If you want the comparison to be truly neutral, leave debt recycling off. If you want to model the full property strategy, enable it.

Which Metric to Focus On

IRR is the primary metric. Δ FV tells you who ends ahead in dollars. Δ PV discounts that difference to today at 5%.

Behind the math (step by step)

1. Starting capital: Down payment + stamp duty + other upfront costs + initial offset balance.
2. Property appreciation: propValue_yr = propValue_0 × (1 + appreciationRate)^yr
3. Rent growth: grossRent_yr = baseRent × (1 + rentGrowthRate)^yr
4. Mortgage: monthly P&I amortisation (IO supported). Offset reduces interest-bearing principal.
5. Depreciation: Div 43 + optional Div 40 where eligible.
6. Tax: Refunds/owings are converted to cashflow impacts.
7. Cashflow equalisation: Shares buy/sell each year mirrors property net cash position.
8. Shares: FIFO ledger for CGT, dividends + franking, ETF MER.
9. Exit: Property CGT (or PPOR exemption) and shares CGT are calculated.
10. IRR: Computed on the full cashflow series: the upfront outlay at year 0, each year's flow at the end of that year, and the sale proceeds at the end of the final year.

Worked example — investor, individual, Sydney house

At these settings, rent growth (4.5%) is below capital growth (6.5%), so gross yield compresses from 4.0% at purchase down to about 2.6% by year 20 — this models the Sydney experience of the 2010s. (Those are this calculator’s shipped defaults; the engine reports a year-20 gross rent of $83,083 against a property value of $3,171,281. Change the rates and the compression changes with them.) The property is negatively geared early on. If modelled as a New Build, losses generate tax refunds that boost the property path's after-tax return. If modelled as Existing/Established, the losses from 1 July 2027 are quarantined — no immediate refund — which meaningfully reduces the property path's cashflow advantage in the early years.

PPOR Scenario Comparison

Switch Purpose to Live-in / PPOR with the same inputs: no rental income means no negative gearing consideration at all, but zero CGT at exit saves a substantial amount. For a $900K property growing at 6.5% over 20 years to ~$3.17M, with a ~$2.27M capital gain, CGT savings for an individual can exceed $400K — this often makes PPOR competitive or superior to renting equivalent space and investing the difference in shares.

Off-the-plan purchases: how the settlement period is modelled

Switch on Off-the-plan purchase (under Property Status) when you sign a contract now and settle months or years later. It is off by default, and with it off every figure on this page is exactly what it was before it existed. Turning it on changes four things, and only these four:

1. The horizon ends on a fixed date. “Investment years” is measured from today to an end date the results state in words (for example “October 2056”). A 24-month wait on a 30-year horizon leaves 28 years of ownership, not 30; if the wait leaves a part-year at the end, the last period is shortened to fit.
2. Both sides put in the same money on the same dates, but use it differently. The deposit is paid at signing, and the shares side buys shares with it at once (no brokerage on the money put in for the purchase, as in the ordinary run). The rest of what settlement needs is the balance of your equity, stamp duty and other costs, and you say where it comes from. Saved from income during the wait (the default for a fresh page): you put it aside in equal monthly amounts over the wait; the shares side buys shares with each amount as it is saved, and the property side holds the growing balance in cash at the rate you set (default 4% pre-tax; the interest is taxed at your rate and paid out as it is earned, and the shares side matches it dollar for dollar so the two sides still cost you the same each period), then spends all of it at settlement. Arrives at settlement (a gift, sale proceeds or another loan): the shares side buys shares with it at settlement, and the property side holds no cash, so it earns no interest. Already set aside at signing: you hold all of it on day one, so the shares side buys shares with it at signing and the property side holds it in cash until settlement; this is the only model the page had before the choice existed, and a share link or saved scenario made before then opens on it. In all three, both sides receive the same cash on the same dates; only what each does with it before settlement differs.
3. The property starts costing and earning at settlement. Between signing and settlement the property grows in value from the contract price at the “growth to settlement” rate (it starts at your Appreciation rate; you can override it) and nothing else happens: no loan, no rent, no holding costs, no depreciation. At settlement the loan is your loan-to-value ratio times the contract price; rent and holding costs are set on the value the property has grown to; depreciation starts; stamp duty and costs are paid.
4. Tax counts from the contract date. For a purchase under a contract you acquire the asset “when the disposal contract is entered into” (s 109-5(2), CGT event A1, case 1, of the Income Tax Assessment Act 1997), not when you become its owner at settlement (the general rule in s 109-5(1)). So the capital gains hold period runs from the contract date, the cost base is the contract price plus duty and costs, and the 1 July 2027 value is read off the simulated path from the contract date. The main residence exemption is different: it runs over your ownership period, which for a home bought under a contract starts at settlement (s 118-130(2); the ATO: “If you buy your home, the ‘time you acquire it’ is the settlement date of the contract”, ATO: Moving to a new main residence). Living in it from settlement, the whole gain is exempt however long the wait.

Three results are shown beside the verdict. The paper gain at settlement is the value at settlement less the contract price; the effective return on the deposit compounds that gain over the wait against the deposit alone (a leveraged, unrealised figure). The cost of waiting (net) is what the same money, arriving on the same dates, earned in shares over the wait, less the after-tax interest the property side earned on its cash: the net charge to the property side for the months before settlement. It depends on where the settlement money comes from, because that decides how much is invested in shares before settlement, and for how long.

On the default run (NSW, $900,000, 80% loan, 30 years, property 5.8%, shares 8%): with the toggle off, shares finish $454,897 ahead and the IRRs are 7.82% (property) and 8.29% (shares). With a 24-month wait at 10% deposit and 5.8% growth to settlement, and the settlement money saved from income during the wait, property finishes $90,992 ahead and the IRRs are 8.38% (property) and 8.28% (shares). If the money is instead already set aside at signing, property finishes $1,422 ahead and the IRRs are 8.29% and 8.29%; if it arrives at settlement, property finishes $165,979 ahead and the IRRs are 8.46% and 8.26%. The paper gain at settlement is $107,428, an effective return on the $90,000 deposit of about 48% a year. The cost of waiting (net) is $27,030 when the money is saved from income, $37,176 when it is already set aside and $18,291 when it arrives at settlement. Most of the move towards property is not the paper gain: it is the two years of mortgage and holding costs the property side never pays, which the shares side would have had to match and invest.

Stop using the negative-cost workarounds. Both put a negative figure into “Other upfront costs”. The first credits the property with its growth during construction, to make up for value gained before settlement: on the default run, $900,000 × (1.058² − 1) = $107,428. Against the model above (10% deposit, 24-month wait) it lifts property’s proceeds by $75,635, cuts shares’ by $540,013, raises the property’s capital gains tax by $23,659, and takes a $90,992 property lead to a $706,641 property lead. The second enters the settlement money you do not need until settlement ($126,687) as a negative cost: it lifts property’s proceeds by $71,110, cuts shares’ by $752,773, raises the capital gains tax by $28,185, and takes the same lead to a $914,874 property lead. Each is wrong for the same reasons. A negative cost shrinks the starting capital on both sides, so it removes cash from the shares side that the model already accounts for: the shares side invests the settlement money as it arrives, and a negative cost deletes it altogether. It lowers the cost base, so the capital gains tax goes up. It treats the growth as a bonus on the $90,000 deposit, when the deposit controls the whole $900,000 asset and the growth is not cash you hold. And it ignores the two years of mortgage and holding costs the property side never pays before settlement, which the shares side would have had to match. Use the toggle instead.

Assumed, not modelled. The deposit is assumed to earn no interest for you (it sits with the developer or in a trust). If your contract pays you the interest, this calculator does not include it.

What is not modelled. No valuation shortfall: the loan is your loan-to-value ratio times the contract price even if the bank values the finished property lower. Stamp duty timing is sourced for Queensland only: the model pays the duty with the transfer at settlement, or, if you choose it for Queensland, in month 2 after signing (the month-end at or before the 74 days that Queensland’s Revenue Office gives for an unconditional contract lodged as a relevant transfer agreement: 60 days to lodge, 14 to pay); a contract conditional on plan registration may be given longer to lodge, and which timing applies depends on the contract and the lodgement route. NSW investors cannot defer the duty on an off-the-plan purchase. Every other state is a generic assumption (due at settlement), not yet sourced. The first home owner grant, the foreign purchaser surcharge and the citizenship test for concessions are not modelled. The Act’s treatment of a contract signed before 1 July 2027 that settles after it is unsettled for the deemed disposal in s 112-155, and the draft instrument that defines a new dwelling has not been made law; the model keeps the contract date as the acquisition date throughout. Depreciation is struck on the contract price from settlement.

Glossary

• LMI: Lenders Mortgage Insurance — required when LVR > 80%. Protects the lender, paid by borrower. Capitalised into loan.
• LVR: Loan-to-value ratio — loan ÷ property price. Above 80% a lender normally charges LMI.
• Negative Gearing: When deductible costs (mostly interest) exceed rent, the loss reduces your other taxable income. From the 2027-28 income year (1 July 2027) it is removed for an established property bought after 7.30 pm AEST on 12 May 2026 (the loss is quarantined) and retained for new builds and for a property bought before then; the calculator models that split.
• Positive Gearing: Rental income exceeds all costs — the property generates positive taxable income.
• CGT: Capital Gains Tax — tax on the gain from selling an asset. Under the reform effective 1 July 2027, individuals keep the 50% discount on the part of a gain that accrued before that date (whenever the asset is sold); the part accruing from that date is indexed for CPI (using the rate set in Inflation (CPI), Investor Profile) and the real gain is taxed through the resident brackets on top of your other income in the sale year and topped up to a 30% minimum where they charge less (in Flat rate mode: your entered rate or 30%, whichever is higher; a minimum this calculator applies to every individual — see Limitations). SMSF and Company structures are unaffected — see Limitations for their unchanged treatment.
• PPOR / Main Residence Exemption: Your principal place of residence is exempt from CGT under Section 118-110 ITAA 1997. The full exemption applies if you lived there the entire ownership period.
• FIFO: First In, First Out — the tax accounting method used here for shares CGT. The oldest lots are sold first. For the individual structure, the part of each lot's gain accruing from 1 July 2027 is indexed for CPI and the part accrued before that date keeps the 50% discount; at the final sale the lots' gains and losses are netted with each other (never with the property's: the two are alternative strategies) and taxed through the brackets (with the 30% minimum top-up on the post-reform part), while a lot sold earlier is taxed at your Marginal Rate or a 30% minimum, whichever is higher.
• IRR: Internal Rate of Return — the discount rate that makes the NPV of all cash flows (including terminal proceeds) equal to zero. The primary performance metric here.
• Δ FV (Delta Future Value): Property net proceeds minus shares net proceeds at exit. Positive = property wins.
• Δ PV (Delta Present Value): ΔFV discounted to today at 5% pa. Shows the present-day value of the terminal advantage.
• Break-even Year (shown as Lead Change): The last year after which, if you sold at the end of that year, the other side stays ahead on proceeds after tax and selling costs.
• Cashflow Equalisation: Annual cash flows are forced to be identical in both paths. Only the terminal proceeds differ. Makes the comparison genuinely apples-to-apples.
• Offset Account: A bank account linked to your mortgage. The balance reduces the interest-bearing loan principal. $50K in offset on a $720K loan = you only pay interest on $670K.
• Margin Loan: Borrowing to invest in shares, using the share portfolio as collateral. Amplifies both gains and losses. Interest is tax-deductible. LVR (loan-to-value ratio) here is the margin loan divided by the share portfolio value.
• Division 40: Depreciation on removable plant and equipment (carpet, appliances, air conditioning), on a diminishing-value basis. Only available on a new build or where you bought the assets yourself.
• Division 43: The capital-works deduction on the building itself, 2.5% of construction cost a year for 40 years from completion. The build year decides how many of those years are left.
• Yield Compression: When rental yield (rent/price) falls over time because prices grow faster than rents. Common in capital cities during bull markets.
• Franking Credits: Tax an Australian company has already paid on profits distributed as a dividend. You are taxed on the grossed-up amount and credited with the tax paid; excess credits are refunded.
• Cost base: What the asset is treated as having cost for CGT. This calculator has no purchase-date input, so the cost base is the price you enter; a property bought long ago has its accrued gain, and therefore its CGT, understated.
• CGT discount: The reduction applied to a gain on an asset held over 12 months: 50% for individuals on the part of a gain that accrued before 1 July 2027 (whenever the asset is sold), 33.3% for complying super funds. For the part accruing from that date the individual discount is replaced by CPI cost-base indexation with a 30% minimum tax.
• Cashflow neutrality: The rule that makes the comparison fair. Both sides cost you the same out of pocket each year, so what differs is the strategy rather than how much you committed. The Neutrality mode setting decides whether loan principal and offset top-ups count as a cost both sides pay (pocket-neutral, the default) or as the owner’s saving that stays with the property and is not matched on the shares side (consumption-neutral, the forced-savings view).
• Debt recycling: Paying down non-deductible home-loan debt, redrawing the same amount and investing it, so the interest becomes deductible without increasing total borrowings.
• Land tax: An annual state tax on the land value of investment property above a threshold (the ACT has no threshold but charges a fixed amount). It does not apply to a PPOR.
• Terminal wealth: What each side is worth at the end of the horizon, after selling costs, CGT and any loan being cleared. It is the figure the verdict compares.

Limitations & assumptions

• Margin loan: there are two modes and the page says which is on. Fixed dollar loan sizes the loan once at the start and never changes it, so the LVR falls as the portfolio grows. Hold LVR at the target re-gears once a year, at the year-end, to the target LVR × the whole portfolio (not in the final year); between year-ends the LVR drifts, and a fall inside a year is not acted on until the year-end. The lender's maximum LVR (default 75%) is an assumption inside the 40–80% range the RBA reports for standard margin loans (Bulletin, December 2009), not any lender's figure; it is used only to check the starting LVR, to flag a deterministic year-end above it, and, in re-gear mode, to count margin calls in the Monte Carlo (where the sale back to the target is the same sale the re-gear makes). There are no lender-specific rules, no margin-call buffer (the RBA reports 5–10% in practice) beyond that maximum, no stock-by-stock LVRs, no minimum loan or fees, and the margin rate is held constant; the 7.5% default is an assumption. Interim sales to repay the loan pay CGT from the proceeds in the year of sale.
• Constant growth rates: Capital growth and rent growth are fixed annual rates. Real returns are lumpy, cyclical, and path-dependent — use Monte Carlo to stress-test.
• No vacancy events in base case: Vacancy/repair events are stochastic in Monte Carlo only. The base case assumes 100% occupancy at the specified occupancy rate.
• Post-2027 individual CGT reform: For the individual structure, the 50% discount is replaced by CPI cost-base indexation for gains accruing from 1 July 2027 (it is kept on the part of a gain accruing before that date). CGT is calculated on the CPI-indexed real gain — indexed using the rate set in Inflation (CPI), Investor Profile — which by default is added to your other taxable income in the sale year and taxed through the brackets, with a top-up to the 30% minimum where they charge less (s 119-10); in Flat rate mode, and for shares sold before the end, it is taxed at the rate used or 30%, whichever is higher (see the next point for who the minimum does not apply to). Complying super funds (SMSF, both accumulation and pension phase) and companies are unaffected by this reform and correctly retain their existing treatment: SMSF accumulation is taxed at 15% on two-thirds of the gain (10% effective), SMSF pension phase is 0%, and companies are taxed at 30% with no discount. If your SMSF or Company number didn't change after this update, that's expected, not a bug.
• Negative gearing: quarantining (ITAA 1997 s 26-155) applies from the 2027-28 income year (1 July 2027). A rental loss before that date offsets your other income at your marginal rate; the year that straddles 1 July 2027 is split by time. The quarantined pool reduces later rental profits, then the capital gain at sale, after capital losses (s 102-5(1) Steps 3-4). Any of it left after the sale carries forward to the next income year (s 26-155(1)(c)); the model has no other dwelling to use it against, so it has no further effect. For an established property bought (contract signed) after 7.30 pm AEST on 12 May 2026, rental losses are quarantined from 1 July 2027 (the 2027-28 income year); losses before then are deductible as usual. A property bought before that time is not affected. (s 26-155(2)(a), (3)). The calculator dates the purchase from the month the run starts. A New Build is treated as a “new residential dwelling” and never quarantined (s 26-155(2)(b)): that is this calculator’s assumption, because that term depends on requirements the Minister has not yet determined (s 26-160(4); none on the Federal Register as at 24 October 2026). The calculator also quarantines an SMSF’s rental losses, which the Act does not (s 26-155(4)(b) excludes a complying superannuation entity). None of the quarantined expenditure is added to the property’s cost base (s 110-38(8A)): the cost base here is the price, stamp duty and other purchase costs, less capital works claimed.
• New residential dwellings: for the individual structure the Act keeps the 50% discount on the whole gain, with a choice of indexation instead (ITAA 1997 s 115-102(1), (2), (5)), where the dwelling is a “new residential dwelling”. That term turns on requirements the Minister must determine by legislative instrument (s 26-160(4)); none had been made (checked 24 October 2026), but Treasury released draft requirements for consultation on 3 August 2026 (closed 21 August), which are not law. The draft’s two main tests are that the dwelling’s certificate of occupancy must have been first issued after the 12 May 2026 announcement, and a buyer acquiring from another entity must do so within 24 months of that certificate; occupancy is not a test. The draft also covers dwellings added on a parcel and building conversions, and has a transition rule for builders’ stock held before the announcement. When Property Status is New Build this calculator takes the lower of the discount and indexation as the taxpayer’s choice, comparing the whole sale year’s tax both ways. The discount is 50% of the whole gain, after the quarantined-loss offset and with every capital works reduction already off the cost base, taxed with your other income in the sale year (or at your entered rate in Flat rate mode): no 1 July 2027 split, no indexation and no 30% minimum (s 112-155(1)(e), s 119-5(2)); indexation is the method described in the other bullets. The choice is made for the property only: the share lots are never given the discount. “New Build” on this page is a negative-gearing definition (never previously occupied, newly built or off the plan) and may not match the Minister’s requirements, so a New Build result assumes the dwelling meets them; it does not say that any particular dwelling does. SMSF and Company structures are not affected.
• Capital works claimed after 1 July 2027: Division 43 deductions reduce the cost base (ITAA 1997 s 110-45). The deemed sale on 30 June 2027 fixes the deferred gain at the 1 July 2027 value less the cost base on 30 June 2027, so only the capital works claimed up to then (pro rata within the year) reduce it. Capital works deductions claimed after 1 July 2027 are taken off the indexed cost base, unindexed: the cost base for the rest of the gain is the 1 July 2027 value indexed to the sale, less those later claims. The Act does not settle whether each later deduction should instead reduce the balance when it is claimed, with the reduced balance indexed from then on (s 114-15(3) is written for a modification that reduces the total cost base, and s 110-45 says deducted expenditure does not form part of the cost base), so this calculator does not model that reading. It would add about $42k to the property CGT on the default run, and up to about $87k across the scenarios we tested (a 30-year hold with an 80% building share, at 4% or 6.5% growth, priced on the indexation method; a New Build would take the discount instead in those scenarios). Whether Division 40 deductions on plant and equipment reduce the cost base is an open question; with the Division 40 option on they are treated the same way as Division 43.
• Selling costs: The sale agent fee is the only selling cost with its own input. Legal, conveyancing and advertising costs on the sale also reduce the taxable gain; include them in the agent fee % if you want them modelled.
• CGT indexation is a CPI proxy: Indexation uses your assumed Inflation (CPI) rate, not actual ATO-published quarterly CPI figures — treat CGT results as an estimate. This tool applies the 30% minimum tax in every case; by law it applies to resident individuals and not in a year the person receives the Age Pension or listed income-support payments (s 119-15), so figures for Age Pension recipients are overstated. Legal status: this is enacted law — Treasury Laws Amendment (Tax Reform No. 1) Act 2026 (Act No. 49 of 2026) and Income Tax Rates Amendment (Tax Reform No. 1) Act 2026 (Act No. 50), both Royal Assent 26 June 2026 — not a proposal or a Budget announcement. What survives: the 50% discount is kept on the part of a gain that accrued before 1 July 2027, new residential dwellings keep a 50% discount (with a choice of indexation instead), and the affordable housing discount of up to 60% is retained. Indexation basis: Tepuy compounds CPI annually; real indexation uses the ATO’s published quarterly CPI index numbers, so treat the indexed figure as indicative. Transition method: the Subdivision 112-E deemed sale is modelled: the part up to the asset’s value on that date keeps the 50% discount, and that value, indexed, is the cost base from then on. The 1 July 2027 value is estimated from this calculator’s growth assumption, because the value the Act uses is the asset’s market value on that date, which this calculator cannot know. For the property and for each share lot it is read off the growth path this calculator simulates. The Act’s own transition is a deemed sale on 30 June 2027 and reacquisition on 1 July 2027, at market value or at a method the Minister may determine (sections 112-155 and 112-185). No determination under s 112-185 had been made (checked 16 October 2026); Treasury released a draft for consultation on 3 August 2026 (closed 21 August); a draft is not law and the method would be a choice. The draft method assumes the asset grew at one steady compound rate from its purchase price to the sale price, which is what this calculator estimates, and agrees with our estimate within $200 on the scenarios we tested.
• Stamp duty approximations: Brackets were last verified against the published state revenue office schedules on 30 August 2026, for all eight states and territories (ACT and NT duty are formula estimates). Concession eligibility rules are simplified. Always verify with your state's revenue office or a conveyancer.
• PPOR simplification: Full exemption assumed — partial exemptions (e.g. renting out rooms, or not living there the full period) are not modelled. An off-the-plan home is fully exempt too: the ownership period the exemption covers starts at settlement, not at the contract date, so the wait before settlement is not a non-main-residence period. Not modelled: the six-year absence rule (s 118-145: live in it, then rent it for up to six years and still treat it as your main residence) and the six-month overlap when you buy a new home before selling the old one (s 118-140). A partial exemption applies if the home was your main residence for only part of the time you owned it. See the ATO pages ATO: Moving to a new main residence and ATO: Treating former home as main residence.
• Off-the-plan: no valuation shortfall, stamp duty timing sourced for Queensland only (otherwise paid at settlement, a generic assumption), the first home owner grant, the foreign purchaser surcharge, and an unsettled s 112-155 treatment of a contract signed before 1 July 2027 that settles after it. Assumed: The deposit is assumed to earn no interest for you (it sits with the developer or in a trust). If your contract pays you the interest, this calculator does not include it. See how the settlement period is modelled.
• Interest-only loans: Modelled as IO payments for the specified period, then P&I on the remaining balance. Refinancing costs and rate changes at IO end are not included.
• Loan interest is charged monthly. Interest is charged on the loan balance at the start of each month (the annual rate ÷ 12), then that month’s repayment is taken; an interest-only month pays the interest alone. A principal-and-interest loan is repaid in full by the end of the loan term, and nothing is repaid after it. Results are still shown a year at a time. Two simplifications remain: each year’s offset contribution is credited at the start of that year, and the interest the offset saves comes back to you as cash rather than shortening the loan. In Monte Carlo runs, each change in the simulated rate re-sizes the repayment to repay the balance left over the rest of the loan term, so every path repays the loan by the end of its term.
• No land tax threshold sharing: Land tax is calculated on the investment property's land value only. Aggregated land tax across multiple properties is not modelled. It uses the general scales for an individual owner: trust, company, absentee-owner and foreign-owner surcharges are not modelled, nor WA's cap on a year's rise in taxable value. Sources, dates and the later-year assumptions are in the methodology.
• Brisbane council and water suggestions: Brisbane only, at 2026-27 prices (shown when State is QLD; nothing changes until you click Apply). The council parity factor for units (clause 4.1 of the Resolution of Rates and Charges) is not modelled, and one waste utility charge per CTS lot is assumed (not verified). The owner-occupier cap on general-rate rises and the on-time discount are not modelled. Once applied, the figures escalate with Inflation (CPI) like the existing inputs, though council’s own 2026-27 rise was 3.97%. How the suggestion is worked out.
• Inflation and owning costs: All figures are nominal (not inflation-adjusted). One input, Inflation (CPI) (default 2.5%, the midpoint of the RBA’s inflation target, which ASIC also uses for super forecasts), does two jobs: it indexes the CGT cost base, and it raises strata levies (unless you give strata its own rate), water and the council base charge by that rate every year, counted from today’s dollars. Insurance, maintenance and the land part of council rates follow the property’s value, and agent fees follow rent, so none of them gets a second escalation. Water, council and strata amounts you enter are therefore read as today’s figures. Real strata levies, council rates and water charges are set by the body corporate, the council and the water authority, and can rise faster or slower than CPI; type your own strata rate, or set the CPI to test it.
• Maintenance: by default a flat percentage of the property’s value each year, so it grows with the value. For a New Build you can switch on a ramp instead: maintenance starts, by default, at 0.2% of value in the first year you own it and rises in a straight line to 0.8% over 20 years; you can change all three (an apartment that is a New Build defaults to a 0.4% maximum). Age is counted from settlement for an off-the-plan purchase. The defaults are our assumptions, not figures from an Australian source: statutory building-warranty cover periods (QBCC’s, for example) explain why repair costs are low in a new building’s first years, not how fast they rise. For an apartment, strata levies already cover the building, so a house-level maximum may overstate your costs. An existing property keeps its flat rate.
• Capital gains tax rate: By default the sale year’s net capital gain is added to your other taxable income in that year and taxed through the resident rates for that income year, plus 2% Medicare and the 30% minimum-tax top-up on the part from 1 July 2027. Each side is taxed as its own investor, because the two are alternative strategies, not one person’s holdings: the shares’ gains and losses are netted with each other, the property is taxed on its own gain, each is added to the same other income, and one side’s capital loss never reduces the other side’s tax. The brackets are held at their legislated values for every future year, so real bracket creep is not modelled. Offsets such as the low income tax offset (LITO) and the seniors and pensioners tax offset (SAPTO) are ignored, and all assets are sold in the final year as one lump. In Flat rate mode one rate you type (Medicare included) is applied instead, to each side’s gain after the same netting. See the worked example.
• Tax simplification: Individual structure uses your Marginal Rate for everything while you hold (rent, deductions, dividends) and for shares sold before the end, with the 2% Medicare levy assumed to be inside the rate you type. Those interim share sales are taxed at that flat rate (or 30% on the post-reform part, if higher), netted a year at a time: a capital loss offsets that year’s share gains, and a net capital loss left at the end of a year is carried forward to the shares’ later sales, the final sale included. A loss on the final sale is not set back against gains already taxed on interim sales earlier that year. A holding bought before 1 July 2027 and sold after it is, as the Act deems it sold and bought back at its value on that day (s 112-155), two gains or losses in the year of sale: one up to its 1 July 2027 value and one after it (a loss after it measured from that value, not indexed); each is netted with that side’s other gains and losses, so a fall before 1 July 2027 can offset later gains, and any excess carries forward. Other surcharges are not included. SMSF uses flat 15%. Company uses 30%.
• Interim share-sale CGT is paid from the sale proceeds in the year of sale: Shares sold part-way through the hold (to cover the fund’s fee, margin interest, or to match the property side’s cash flow) are sold in a size that leaves you the cash you needed after brokerage and the CGT on that sale, which is paid out of the proceeds that year. This is a simplification: in practice the tax follows your tax return, so the real payment falls later.
• Shares as a pooled asset: The shares portfolio is modelled as a single asset. In reality, a diversified portfolio has sector-specific risks not captured by a single volatility parameter.
• Franking credit refunds: Modelled accurately for individuals and SMSFs. Refunds are not available for companies (imputation credits offset corporate tax only).

Frequently asked questions about property vs shares

• Why is stamp duty so high — is this correct? Stamp duty is automatically calculated based on the state, purchase price, and whether you're a first home buyer. For example, a $900K property in NSW as an investor attracts ~$35,000 in stamp duty. As an FHB buying an existing home under $800K in NSW, stamp duty is waived entirely. The brackets were last verified against the published state revenue office schedules on 30 August 2026. If you've negotiated a different amount, you can override the auto-calculated value directly.
• What exactly changes in PPOR mode? Three things: (1) Rental income is set to zero — you're living there, not renting it out. (2) CGT is zero at exit — the main residence exemption (s118-110 ITAA 1997) means no tax on the capital gain. (3) Land tax is zero — your primary residence is exempt in all Australian states. This makes the property path significantly more tax-advantaged, and often makes PPOR the winner even against historically strong share returns. Not modelled: the six-year absence rule (s 118-145: live in it, then rent it for up to six years and still treat it as your main residence) and the six-month overlap when you buy a new home before selling the old one (s 118-140). A partial exemption applies if the home was your main residence for only part of the time you owned it.
• Why can rent growth differ from capital growth? In practice, rents and prices don't move in lockstep. During periods of strong price growth (e.g. Sydney 2012–2017), rents grew much slower than prices, compressing the gross yield. At this calculator’s defaults (4.0% starting yield, 4.5% rent growth, 6.5% capital growth) the engine compresses the gross yield from 4.0% at purchase to about 2.6% by year 20. This model captures that by using separate rates. If you set them equal, the gross yield stays flat (traditional model). Realistic modelling usually has rent growth slightly below capital growth over long periods.
• How does the negative gearing reform (from 1 July 2027) work in the model? The Treasury Laws Amendment (Tax Reform No. 1) Act 2026 quarantines rental losses on existing (established) residential properties from the 2027-28 income year (1 July 2027) (ITAA 1997 s 26-155). A net rental loss (rent − expenses − interest − depreciation) arising before 1 July 2027 still offsets your salary and other income, as it always has. From 1 July 2027 it cannot: it is quarantined in a carry-forward pool, which reduces tax in later years when the property turns profitable (positive rental income), and any balance left at sale reduces the capital gain. The year that straddles 1 July 2027 is split by time: the part before it is deductible, the rest is quarantined. For an established property bought (contract signed) after 7.30 pm AEST on 12 May 2026, rental losses are quarantined from 1 July 2027 (the 2027-28 income year); losses before then are deductible as usual. A property bought before that time is not affected. New builds keep traditional negative gearing — losses still offset other income in the year they occur — but only a dwelling that meets the requirements for a “new residential dwelling” is exempt, and those requirements are for the Minister to determine (s 26-160(4)); none had been made (none on the Federal Register as at 24 October 2026). Treating a New Build as exempt is this calculator’s assumption. Select "New Build" or "Existing" under Property Status to choose the treatment. Note: depreciation (Div 40 + Div 43) still reduces taxable rental income under both regimes; for an existing property, from 1 July 2027 it builds up the carry-forward pool rather than generating an immediate refund.
• Why does property often win early but shares catch up later? Property benefits from leverage — a $720K loan amplifies returns on your $220K capital. But leverage cuts both ways, and interest is a real cost. Over time, as the loan is paid down, the leverage benefit diminishes. Shares, growing unencumbered from day 1 (or with a margin loan), often compound faster in absolute dollar terms once property's loan drag catches up.
• Is the comparison fair with the offset account? In pocket-neutral mode (the default), yes. The starting offset balance is added to both investors' starting capital, and the shares investor puts it into shares from day 0. Each yearly offset contribution is charged to the property side and the shares investor buys the same amount of shares, and the whole offset balance comes back to the property side at exit. The offset reduces the property investor's interest; the shares investor's matching money compounds in shares. The consumption-neutral (forced-savings) view is deliberately not like-for-like: the yearly contributions, like loan principal, are the owner's saving and stay with the property, but they are not charged to either side's cash flow and the shares investor does not invest a matching amount. They still reduce the loan interest and come back at exit, so that view favours property by design.
• What is the Break-even Year? The last year after which, if you sold at the end of that year, the other side stays ahead on proceeds after tax and selling costs. Each year the calculator compares property net proceeds (after CGT, selling costs and the loan, plus the offset balance: the starting balance and the yearly contributions) with shares net proceeds (after CGT, brokerage and any margin loan) and reports the year the lead last changed hands — the Lead Change figure. If the lead never changes hands it says so. Equity before tax and selling costs can cross in a different year, because the property carries stamp duty, CGT and agent fees on exit.
• What's the difference between IRR and CAGR? CAGR (Compound Annual Growth Rate) measures asset price growth only. IRR (Internal Rate of Return) measures the actual return on your invested capital, accounting for all cash flows — the initial outlay, annual negative/positive gearing cash flows, and the final exit proceeds. IRR is the more meaningful metric because it captures the full economic picture, including leverage and tax effects.
• How does franking credit refund work? Australian companies pay 30% corporate tax before paying dividends. Shareholders get franking credits for this prepaid tax. If your personal tax rate is lower than 30% (or you're in pension phase), the ATO refunds the surplus. E.g. if you receive $4,286 in franking credits but only owe $2,500 in tax on the grossed-up dividend, you get a $1,786 cash refund. This calculator models this correctly for individuals and SMSFs.
• Why do different property types change the result? Property type auto-fills three key parameters: building component % (affects depreciation deductions), appreciation rate (houses historically outperform apartments over long horizons), and rental yield (apartments have higher yields but lower growth). You can override any of these after selecting a type.
• Does LMI affect the comparison? Yes — LMI is capitalised into the loan, increasing the loan balance (and therefore interest costs). It does not add to the shares investor's starting capital (since it's financed, not a cash cost). This creates a small disadvantage for the property path when LVR > 80%, accurately reflecting the true cost of higher leverage. Use the LMI Calculator to see your exact premium before running this comparison.

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