Property vs shares calculator

Investment property defaults

$1,000,000 property and 20% deposit. This gives the calculator a simple Australian property example with meaningful leverage. The deposit is fully adjustable and the model gives the ETF the same upfront cash including buying costs.

LMI below a 20% deposit. A low deposit may attract lenders mortgage insurance. If you enter an LMI amount, it is treated as a one-off premium added to the loan. It is not increased with inflation each year and any tax deduction for borrowing expenses is not modelled.

4% nominal property capital growth. This includes inflation and excludes rental income. At the 2.5% inflation default it represents about 1.46% real capital growth. Inflation isn’t added to the property value again.

3.5% gross rental yield and 2% vacancy. Rental income is separate from capital growth. The calculator reduces gross rent by the vacancy allowance, giving a 3.43% first year rental yield after vacancy under the defaults. Rent then increases with inflation.

1.6% first-year property costs. The simple default starts at $16,000 for a $1,000,000 property and then grows with inflation. You can instead build the allowance from maintenance, rates and insurance, management, strata and land tax. Land tax varies materially by state, land value, ownership and other holdings.

5.83% indicative first-year property return after ongoing costs. Under the defaults this is 4% capital growth plus 3.43% rent after vacancy, less 1.6% first-year property costs. It is before mortgage interest and tax, which are modelled separately based on the investor’s financing and tax assumptions. Rent and ongoing property costs then grow with inflation, so changing the property capital growth assumption doesn’t mechanically change the dollar holding costs.

6% average mortgage rate. The calculator uses one long term average rate rather than trying to predict future rate changes. You can select principal and interest, interest only, or an initial interest only period followed by principal and interest.

Optional major works. You can add two renovation, refurbishment or capital works payments by year and amount. The ETF receives the same cash, and the works are added to the property’s CGT cost base as the fourth element. Any resulting increase in the property’s market value isn’t modelled. Confirm your own treatment with tax advice.

5% buying costs and 3.5% selling costs. These are broad allowances for costs such as stamp duty, conveyancing, inspections, agent commission and marketing. Stamp duty is usually one of the largest buying costs and varies significantly by state.

State and territory taxes

Buying costs and land tax are the two assumptions that vary most by where you buy. The calculator uses one national default for each rather than changing them when you pick a location, because both depend on more than the state. Use the figures below to set your own under More assumptions.

Stamp duty. Indicative general transfer duty on a $1,000,000 investment property, on standard non-owner-occupier rates available in August 2026. It excludes concessions, foreign purchaser surcharges and special circumstances, and duty is charged on a sliding scale, so these figures don’t scale with the price you entered above. The 5% buying costs default also has to cover conveyancing, inspections and loan costs, so it is comfortable in the ACT, Queensland, New South Wales, Tasmania and Western Australia, and tight in South Australia and the Northern Territory. In Victoria, duty alone exceeds it, so raise the figure if you are buying there.

Land tax. Land tax is charged annually on the unimproved land value, not on what you paid, so a $1,000,000 apartment and a $1,000,000 house on a large block can attract very different amounts. Land is aggregated across everything you own in that jurisdiction, so a second property can push the first over the threshold, and rates differ again for trusts, companies and foreign owners. To convert an estimate into the calculator’s input: annual land tax in dollars, divided by the property price, times 100. A $2,500 assessment on a $1,000,000 property is 0.25%, which is the default.

Thresholds and rates as published by each revenue office, checked September 2026. They change, usually annually, so follow the link before relying on them. Figures shown are the general rates for individuals.

ETF portfolio defaults

5.2% nominal ETF capital growth. This includes inflation and excludes ETF income. At the 2.5% inflation default it represents about 2.63% real capital growth before fees.

2.8% income yield. ETF income is modelled separately from capital growth. The gross income assumption includes the benefit of any franking credits because those credits form part of an investor’s total return.

0.75% all-in ETF portfolio fees. This includes the assumed cost of portfolio management, brokerage and underlying ETF management expense ratios (MERs). It is deducted from the combined capital growth and income return. No additional portfolio fee is deducted elsewhere.

7.25% total return after fees. Under the defaults this is 5.2% capital growth plus 2.8% income, less 0.75% all-in fees. This is before tax and inflation.

Income is reinvested after tax. Gross ETF income is taxed at the selected marginal tax rate and the amount left is reinvested. The model assumes the gross income already captures franking credits but does not separately model foreign tax offsets or fund level capital gain distributions.

Single compounding investment. The ETF is intentionally modelled as one continuously compounding portfolio for this comparison rather than as individual tax parcels.

Tax and shared assumptions

Tax rules comparison. The tax rules selector changes only the tax treatment. It keeps the investment period, returns, costs, tax rate and financing assumptions the same. Within each scenario the ETF receives the same cash as the property. Total cash can differ between tax scenarios because tax treatment changes the property shortfall. Previous rules assumes negative gearing remains available throughout and eligible gains receive the 50% CGT discount once the 12 month holding requirement is met. The rules from 1 July 2027 use the date based transition settings modelled below.

2.5% inflation. This is used as a long term starting assumption. It increases rent and other property costs and is used to estimate CGT indexation where eligible.

39% default marginal tax rate. This represents a 37% marginal income tax rate plus the 2% Medicare levy. The income dropdown lets you select another bracket. The calculator assumes an Australian resident individual investing personally.

30% minimum CGT rate under the new rules. Eligible gains accruing from 1 July 2027 use the higher of the selected marginal rate or the 30% minimum rate. If you know you qualify for an exemption you can select the exemption option. This setting isn’t used in the previous rules comparison.

1 July 2027 CGT transition under the new rules. For investments held across this date, the model estimates the gain accrued before the change separately from the indexed gain after the change. For property, the automatic method estimates the 1 July 2027 value from the purchase price and selected property growth. You can instead enter your own estimated market value at that date. This transition isn’t applied in the previous rules comparison.

Established property and negative gearing under the new rules. For an established property bought after 12 May 2026, rental losses can reduce salary income until 1 July 2027. Later losses are quarantined and can reduce future residential income and residential capital gains. For simplicity, every acquisition dated 12 May 2026 is treated as grandfathered. Acquisitions from 13 May 2026 are not. Under the previous rules comparison, negative gearing remains available throughout.

Eligible new builds under the new rules. Selecting this option means the calculator assumes the property satisfies the relevant eligibility requirements. Rental losses continue to receive negative gearing treatment. At sale the model compares the 50% CGT discount with the new indexation method and uses the lower estimated CGT amount. Under the previous rules comparison, new and established properties use the same negative gearing and CGT settings.

What isn’t modelled. ETF income is taxed at your marginal rate as a single gross figure. Franking credits are assumed to be inside that figure, but foreign tax offsets, capital gain distributions, tax deferred distributions, AMIT cost base adjustments and portfolio turnover are not modelled separately. Negative gearing benefits are credited monthly rather than after an annual tax return, which flatters the ETF result by roughly 0.03% at most. One marginal tax rate applies for the whole period, so changes in income, retirement or tax brackets are not reflected. LMI deductibility, loan establishment costs and refinancing costs are excluded.

Capital works. Renovation and capital works are treated as a cash cost and added to the property CGT cost base. Works paid after 1 July 2027 are indexed from the month they are paid. Any increase in the property’s market value from those works is not modelled, so the property result is conservative on that point.

Surplus cash. Where rent exceeds all costs, the property hands cash back. The ETF option sells units to release the same amount, reducing its cost base proportionally and realising CGT at the time. If the portfolio is exhausted the two options stop receiving the same cash and a warning is shown.

Monthly modelling. Cash flows are modelled monthly. Results use simplifying assumptions, so actual tax outcomes can differ from a formal valuation, ATO treatment or your personal circumstances.