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Tax in Australia

See what Australia's tax rules do to your property portfolio.

What Freeholt models for property, income and retirement in Australia, and what it does not.

Model a property in Australia with everything else you own

Free to start. No card. Rules reviewed 24 August 2026.

Australia's capital gains rules change on 1 July 2027From 1 July 2027

Modelled here

  • ✓Tax on rental income (approximate)
  • ✓Capital gains on a sale
  • ✓Duty on purchase (approximate)
  • ✓Annual property or land tax (approximate)
  • ✓Income tax beyond the rent
  • ✓Dividends, interest and share sales
  • ✓Retirement savings
  • ✓Inheritance and what happens on death
Jump to
  • The rules in detail
  • Rate history
  • Recent rule changes
  • What is modelled
  • What is not modelled
  • Questions

AUD · Rates as at 24 August 2026 · Rates editable in Settings · Estimates, not advice

Rental income is taxed at the marginal rate. Residents can offset a rental loss against other income (negative gearing); foreign residents are taxed from the first dollar (no tax free threshold) and lose the 50% CGT discount.

How rental income is taxed in Australia

For a resident owner: Progressive rates from 15% to 45%, stacked on other income in this country. The top rate of 45% applies above A$190,000. The 2% Medicare levy applies above A$28,011, charged here as a flat rate. The low income phase in and the Medicare levy surcharge are not modelled. For an owner living abroad and renting this out: Progressive rates from 30% to 45%, stacked on other income in this country. The top rate of 45% applies above A$190,000.

Interest and losses

Mortgage interest is deductible against the rent. A rental loss can reduce other income in the same year. That changes on 1 July 2027: from then a loss on a residential dwelling acquired on or after 12 May 2026 no longer reduces other income and carries forward against future rental income instead. A dwelling acquired before that date keeps the same year offset, and commercial property stays outside the rule.

Capital gains on a sale

Gains are added to income and taxed at the marginal income rate. Hold for at least 1 year and 50% of the gain is discounted, though a non resident does not get that discount. 15% of the SALE PRICE is withheld at settlement from a non resident seller. It is a credit against the bill, not an extra tax, but it is cash the seller does not get on the day.

Annual property tax while holding

Charged on a sub national scale that differs by state or region, applied per owner on the total land held there.

What it costs to buy

Purchase duty here is more than a single rate, and Freeholt prices the published rules rather than an average. For a foreign buyer Freeholt adds 7.5% on top, as a single figure standing in for a rule that is not a single rate. State stamp duty (~3 to 5.5%) applies on purchase. Most states add a foreign buyer surcharge on top, at a rate that differs by state.

Can a foreign buyer purchase here?

A foreign buyer needs approval before purchasing. Foreign buyers need FIRB approval. Generally new dwellings only, with a ban on buying established homes extended to 30 Jun 2029 (Budget 2026 to 27). Plus state foreign buyer duty and land tax surcharges.

Buying here from abroad

The rules a foreign or non resident buyer meets here, as at 23 October 2026. Each line links to the official page it comes from, which is the one to rely on as these rules change. Estimates for planning, not advice.

  • From 1 April 2025 to 30 June 2029, foreign persons, including temporary residents, are barred from buying established dwellings in Australia, with limited exceptions. Official source
  • A foreign person needs foreign investment approval before buying residential land, and each application carries a fee that is indexed every 1 July. Official source
  • A foreign owner whose dwelling is not lived in or rented out for at least 183 days in a vacancy year pays an annual vacancy fee, which for vacancy years from 9 April 2024 is double the application fee, and lodges a vacancy fee return every year. Official source
  • For contracts from 1 January 2025, the buyer of any Australian property withholds 15% of the price unless the seller provides a clearance certificate showing they are an Australian resident. Official source
  • In New South Wales, a foreign buyer of residential land pays surcharge purchaser duty of 9% from 1 January 2025, on top of ordinary transfer duty. Official source

The full guide: buying property in Australia as a foreigner

Residents of Australia with property abroad

A resident of Australia is taxed on rent and sale gains from property abroad under the same rules as property in Australia, with a credit for the tax paid where the property is. The credit stops at Australia's own tax on that income, so the total is broadly the higher of the two countries' charges. A special regime for people who have just moved to Australia applies in Freeholt's figures only when it is chosen on the tax residence.

What is negative gearing?

A property is negatively geared when the deductible costs, including loan interest, exceed the rent. What that loss is worth depends on the year, because the Treasury Laws Amendment (Tax Reform No. 1) Act 2026 quarantines it for some dwellings and leaves it alone for others; the interest and losses section sets out which, and from when. Freeholt applies both rules by date, so a projection crossing 1 July 2027 changes treatment in the right year, and it shows the yearly loss, the tax it offsets, and the year the property turns positive. The exemption for a new residential dwelling is not modelled, because its definition is still in draft.

How much is land tax?

Land tax is a state tax on the unimproved land value above a threshold, with different thresholds, rates and foreign owner surcharges in each state, and the Northern Territory levies none at all. Freeholt applies each state's published general scale for an individual owner, per owner. Trusts, company and self managed super fund ownership, and several exemptions, change the result. The land tax calculator below estimates it by state.

Can I hold property in superannuation or an SMSF?

A self managed super fund, or SMSF, can hold investment property under strict borrowing and contribution rules, and pays a concessional tax rate on net rent. Freeholt compares holding a property personally, jointly, in a company or trust, or in an SMSF, and shows what each structure keeps after tax.

Income tax in Australia, beyond the rent

Progressive, up to 45%. The bands run Up to 18,200 at 0%; 18,200 to 45,000 at 15%; 45,000 to 135,000 at 30%; 135,000 to 190,000 at 37%; Above 190,000 at 45%. Plus 2% on income above 28,011. Rental profit joins this ladder. Figures in AUD, as verified 29 August 2026.

Dividends, interest and share sales

How Australia taxes investment income. For dividends: Taxed at the marginal income rate. Company tax already paid is credited back in full. That assumes the standard 30% company rate: the rate varies by issuer, and the payer's own rate can be set on a holding. Above 5,000 of credits in a year, a minimum holding period decides whether they qualify, and the projection cannot check that. For interest: Taxed at the marginal income rate. For share sale gains: Taxed at the marginal income rate. Only 50% of the gain is taxable if held 12+ months. A capital loss is set against gains before any discount or allowance, and anything left over carries forward to later years. It relieves capital gains only, never other income.

Pensions and retirement savings

TTE. Taxed at more than one stage. Contributions are taxed going in, at a flat rate. Rate: 15%. Capped at 32,500 a year. Growth inside the fund is taxed at 15%. Withdrawals can start from age 60. After that age, withdrawals are tax free.

Inheritance and what happens on death in Australia

No inheritance, estate or gift tax. But something else stands in its place. That is a researched finding rather than a gap in the model, and it is not the end of the story: Freeholt holds six rules that stand where a transfer tax would be in another country, broadly what a beneficiary's cost base becomes and when a charge falls due, and this page does not attempt to summarise them. These rules were verified 1 July 2026. Freeholt models the country's rules rather than any particular will, so what an estate pays still depends on who inherits and what is in it.

Worth knowing about tax in Australia

Australia's transfer balance cap tests what is moved into a pension account, not what that account is later worth. Growth above the cap does not have to be withdrawn.

How Freeholt models Australia

Every rate above is priced from Freeholt's own table for Australia and runs through the whole projection: rental income, a modelled sale and the annual holding costs all use the same figures. They are also defaults that can be edited in Settings, so a position that differs, or a rate that changes before we catch it, can be corrected and the projection reprices around it.

What running this property costs

In Australia this covers council rates, water charges, strata/body corporate levies, landlord insurance, land tax above the threshold, and ~6 to 8% property management fees.

How borrowing works here

Investors use a 30 year term. Often interest only for the first 1 to 5 years before reverting to principal & interest.

What actually happened here

This country's own record, one year at a time. Nothing on this page is borrowed from another country. Move across a chart to read a year.

Propertyindicative
−20%−10%0%10%20%30%199620102025

A city measure, not the whole country.

Rentindicative
−2%0%2%4%6%8%10%199620102025

A city measure, not the whole country.

Mortgage rate
0%2%4%6%8%10%199620102025

Inflation
0%2%4%6%8%199620102025

Shares
−60%−40%−20%0%20%40%199620102025

Estimate land tax by state

Recent rule changes in Australia

Why this matters now · From 1 July 2027

Australia's capital gains rules change on 1 July 2027

For a sale on or after 1 July 2027 the 50% discount is replaced by indexation of the cost base plus a 30% minimum rate on the gain built up after that date. The gain built up before it keeps the discount, split at a 30 June 2027 valuation.

Who it affects

  • ●Individuals and trusts selling an investment property from 1 July 2027
  • ●Anyone holding a property on 30 June 2027, which is deemed reacquired at that date
  • ●Foreign and temporary residents, who are excluded from the indexation

Source: Treasury Laws Amendment (Tax Reform No. 1) Act 2026 (No. 49, 2026) · Reviewed 30 July 2026

Compare a sale under the old and new rules

Why this matters now · From 10 August 2026

Self managed super funds can no longer borrow to buy residential property

From 10 August 2026 a fund cannot enter a new limited recourse borrowing arrangement over residential property. Arrangements entered before that date, their refinancing and purchases under them are grandfathered.

Who it affects

  • ●Self managed super funds planning to buy residential property with borrowed money
  • ●Funds with an existing arrangement, which keep it

Source: Treasury Laws Amendment (Tax Reform No. 1) Act 2026 (No. 49, 2026), Schedule 5 · Reviewed 30 July 2026

  • 2027-07-01 The first owner of a qualifying NEW residential dwelling may keep the 50% CGT discount instead of indexation with the 30% minimum (Tax Reform No. 1 Act, as passed with amendments on 25 June 2026). Later owners have no such choice, and "new dwelling" awaits a legislative instrument. Freeholt applies the new rules to every dwelling, so a qualifying new build is overstated.
  • 2027-07-01 The same Act restricts negative gearing for residential interests acquired from 7:30pm AEST on 12 May 2026, with new dwellings excepted. Interests acquired earlier are outside it.
  • 2027-04-01 The 2026 to 27 Budget extends the ban on foreign persons buying established dwellings (1 Apr 2025 to 31 Mar 2027) to 30 June 2029. No instrument making it law was found.(proposed only, never priced into your figures)

What Freeholt models here

ApproximateTax on rental income
The Medicare levy is charged as a flat rate above one threshold rather than phased in, so the figure runs low for a higher earner. The Medicare levy surcharge and the low income tax offset are not modelled at all.
ModelledCapital gains on a sale
Priced in the year of the sale under the rules of that year.
ApproximateDuty on purchase
The published scale is priced. The foreign buyer surcharge is carried as one figure, where the real charge follows a rule that is not a single rate.
ApproximateAnnual property or land tax
Land tax uses each state's published general scale for an individual owner. Trusts, company and self managed super fund ownership, and several exemptions, change the result.
ModelledIncome tax beyond the rent
Salary and other income, stacked with the rent.
ModelledDividends, interest and share sales
Investment income and gains, with the local allowances.
ModelledRetirement savings
Contributions, the fund and the way out.
ModelledInheritance and what happens on death
Who pays, and on what, when property passes on.

What Freeholt does not model here

  • Treaty relief between this country and the owner's country of residence
What the figures above leave out (16)
  • The Medicare levy is charged as 2% of income above $28,011. The real levy, once clear of the low income shade in range, is 2% of the whole taxable income, so an Australian resident's levy is understated here by 2% of that first $28,011, and below the threshold both are nil. A foreign resident pays no Medicare levy at all and none is charged in their figure, so for them this is not a gap.
  • On these investment figures the Medicare levy surcharge (an extra 1% to 1.5% for higher earners without private hospital cover) is not added, and the low income tax offset is not taken off. Both are for Australian residents only: the surcharge understates a higher earner, the offset overstates a lower one, the two sit at opposite ends of the income scale and do not cancel, and neither reaches a foreign resident, who is entitled to neither. Division 293's extra 15% on super contributions above $250,000 of income is also left out, and that one can apply to a foreign resident who holds Australian super.
  • Australia's 50% CGT discount needs the asset held more than twelve months. With no holding period given the whole gain is taxed, so a long held gain with no date given is overstated.
  • Every dollar figure here is the 2026/27 financial year's: the $32,500 concessional cap, the $2.1 million transfer balance cap. Australia indexes all of them, some to wages and some to prices, and only this one year's values are held, so for a later year the caps shown are too low and a contribution or transfer may be flagged as over a limit it is within. Confirm the current figures with the ATO.
  • The before tax (concessional) cap is shown as a single year's $32,500. A member whose total super balance was under $500,000 at the previous 30 June can also use up to five years of unused cap, so the real limit may be higher and a contribution shown here as over the cap may in fact be within it.
  • Going over the concessional cap is not a refusal in Australia: the excess is added back to assessable income and taxed at the marginal rate, with a credit for the 15% the fund already took. That charge is not priced, so a contribution over the cap is flagged but the extra tax on the excess is not shown. The true cost is higher than the 15% displayed.
  • The $32,500 cap here is the before tax (concessional) one, and every contribution is measured against it, including after tax (non concessional) money, which has a separate and much larger cap of its own. So an after tax contribution can be well inside its real limit and still be flagged here as a breach when it is not one. The non concessional cap and its bring forward rule, which lets a member use future years' caps early depending on their total super balance, are deliberately not encoded: the figures for them were found only in a calculator's parameter table, with no published source stating them. Downsizer contributions are a third class again and bypass both.
  • The access age of 60 is right for anyone born on or after 1 July 1964. Preservation age steps up from 55 to 60 by date of birth, so for anyone born before that date access is shown later than it really is.
  • Tax free from 60 assumes a condition of release, such as retiring, has also been met. At 60 and still working full time, different rules apply.
  • A super balance's taxable and tax free components are not tracked separately: the whole balance is treated as the taxable component. From 60, with a condition of release met, that changes nothing, because the whole benefit is tax free anyway. Under 60 no figure is given at all rather than a wrong one.
  • An account based pension must pay out at least a minimum each year, rising with age from 4% to 14% of the balance across seven age bands, and the government has temporarily reduced it in nine of the last eighteen years. That minimum is not enforced here, so a projection that draws less than it overstates what can stay in the tax free pension account. The tax on the withdrawals themselves is unaffected, being nil from 60.
  • A transition to retirement pension, which means drawing between 4% and 10% of the balance a year while still working and before a full condition of release, is a distinct phase that is neither accumulation nor retirement, and it is not modelled. For a member on one, these figures assume full retirement, which is not that member's position, and which way they are wrong cannot be established from what is modelled here.
  • Only an accumulation style balance is modelled. A defined benefit pension is a promise of income rather than a pot, and it is tested against its own defined benefit income cap rather than the transfer balance cap shown here. For a defined benefit member these figures describe a different kind of account, and no direction of error can be given.
  • Earnings inside super during the accumulation phase are charged at a flat 15%. Capital gains on assets the fund has held for more than a year get a one third discount, which takes that to 10%, and the discount is not modelled, so the tax drag shown on long held growth assets is overstated.
  • The transfer balance cap shown is the general $2.1m figure. A personal cap depends on the member's own history with the ATO and may be different.
  • Division 296, law from 1 July 2026, adds an extra 15% on the share of the fund's realised earnings attributable to a total super balance above $3 million, and a further 10% on the share above $10 million. It is not applied here, so for a balance above $3 million the tax on the fund's earnings is understated.

Coverage deepens country by country. Every figure is an estimate, not advice.

Compare with another country

Each page is built from the same table the app runs on, so the figures line up side by side.

Compare Australia with another country — rent, gains, annual tax and duty, side by side.

  • Tax in New Zealand
  • Tax in the United Kingdom
  • Tax in the United States
  • Tax in Canada
  • Tax in Spain
  • Tax in France

Questions people ask

Does Freeholt model Australia property tax?
Yes. Rental income tax, capital gains on a sale, duty on purchase and annual property or land tax are priced from Freeholt's own rate table for Australia. Rental income tax, duty on purchase and annual property or land tax carry simplifications that the page names beside the figure. Any rate or threshold can be corrected in Settings so the whole projection reprices. Every figure is an estimate, not advice.
How is rental income from Australia taxed if I live somewhere else?
Progressive rates from 30% to 45%, stacked on other income in this country. The top rate of 45% applies above A$190,000. Tax may also be due in the country of residence, with credit for what was paid here. Estimates only, not advice.
What are the Australia figures as at?
The rate table for Australia was last reviewed on 24 August 2026. Freeholt date stamps every country rather than implying all of them were checked on the same day. Estimates only, not advice.
Does Freeholt handle negative gearing?
Yes, and it applies the 2027 change by date rather than assuming today's rule lasts forever. Until 30 June 2027 a rental loss reduces other income in the same year, per owner. From 1 July 2027 a loss on a dwelling last acquired on or after 12 May 2026 is quarantined and carries forward against future rental income instead, while an earlier dwelling keeps the offset. The projection shows the year each property turns cashflow positive. Figures are estimates, not advice.
Which states does the land tax calculation cover?
Every Australian state and territory, each at its own published general scale and foreign owner surcharge, applied per owner. The Northern Territory levies no annual land tax, so its estimate is zero at any land value. Figures are estimates, not advice.
Can I compare owning in my name against an SMSF?
Yes. The ownership comparison shows personal, joint, company, trust and SMSF side by side, after tax. It is a calculator, not advice.
Is the capital gains tax discount included when I model a sale?
For a sale before 1 July 2027, yes: the twelve month discount, depreciation clawback and selling costs are priced into the year the sale is modelled. From 1 July 2027 there is no discount to include, because indexation of the cost base plus a thirty percent minimum on the gain built up after that date replaces it, and Freeholt prices a later sale that way instead. Estimates only, not advice.

Model a property in Australia alongside everything else you own: see the year your portfolio starts paying you back.

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Guides by country

Land tax calculator (Australia)Capital gains calculator, old and new rules from 1 July 2027 (Australia)Superannuation and SMSF property comparison (Australia)Stamp duty calculator (United Kingdom)Real estate transfer tax calculator (United States)Negative gearing explained (Australia)Rental income tax by country (Worldwide)Buying property abroad: rules for foreign buyers (Worldwide)

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