Skip to main content
austax.tools

Rent vs Buy Calculator Australia

Compare the total wealth outcome of buying a home versus renting and investing the difference over 5-30 years. Includes state-specific stamp duty, mortgage costs, and investment portfolio projection.

Income year the projection starts in. Sets the tax scale and which CGT rules the renter's sale falls under.

Property

$160,000 deposit

For stamp duty calculation (owner-occupier rates)

Ownership Costs

$0 for house

Renting

$31,200 per year

Assumptions

Long-run median ~5%

CPI-aligned ~3%

Renter's portfolio return (e.g. index fund ~7%)

Renter's Capital Gains Tax

Sets the marginal rate on the portfolio's gain

Indexes the cost base after 1 July 2027

After 10 years
Buying puts you ahead by $183,410
Buying Equity
$734,949
CGT-free (main residence)
Renting Portfolio
$551,540
after $94,423 CGT
Renter's CGT (if the portfolio is sold in year 10)
Portfolio before tax$645,963
Cost base (deposit, duty + reinvested savings)$381,448
Capital gain$264,515
Gain to 30 Jun 2027 (50% discount)$13,488
Gain from 1 Jul 2027 (CPI-indexed)$251,027
Cost base indexation relief-$56,870
CGT payable (at 47%)$94,423
Monthly Costs (Year 1)
Buying (mortgage + costs)$4,462.12/mo
Renting$2,600.00/mo
DifferenceBuying costs $1,862.12 more
Break-even yearYear 4
Upfront Costs (Buying)
Deposit (20%)$160,000
Stamp Duty (NSW)$30,187
Legal Fees$2,500
Total Upfront$192,687

Buying wins — At these assumptions, buying builds $183,410 more wealth than renting over 10 years, after the $94,423 of CGT the renter owes on selling their portfolio. Property leverage amplifies gains when growth exceeds interest costs, and your home is CGT-free.

CGT changes on 1 July 2027 — The renter's portfolio is taxed on sale, and this projection crosses the reform. The 50% CGT discount is abolished from 1 July 2027 (Act 49 of 2026). Growth up to 30 June 2027 keeps the discount; growth after that date has its cost base indexed for CPI instead and is taxed at the higher of your marginal rate and the 30% minimum. The split uses the modelled portfolio value at 1 July 2027.

CGT only applies if you sell — This comparison assumes both paths are liquidated in year 10: the renter's portfolio is charged its full CGT bill, and the home is sold after 2.5% in agent commission, marketing and conveyancing. Keep holding and the renter's tax is deferred, not avoided — and selling in stages across income years can lower the rate. Your home's gain stays fully exempt under the main residence exemption; the cost of selling it does not.

Share

Next best steps

Offset vs extra repaymentsCompare mortgage reduction strategiesEstimate solar paybackCompare installed cost with bill savings and export incomeLoan affordabilityHow much can you borrow based on your income?Compare property scenariosSide-by-side property tax comparisons
Year-by-Year Projection

Each row assumes you exit in that year. Equity is CGT-free (main residence exemption) but is shown after the cost of selling; the portfolio column is net of the CGT a sale in that year would trigger, so from1 July 2027 it carries the indexation-and-30%-minimum rules rather than the 50% discount.

YrProperty ValueEquity (Buy)Portfolio after CGTDifference
1$840,000$207,859$224,204-$37,345
2$882,000$258,203$260,703-$24,549
3$926,100$311,162$296,148-$8,138
4$972,405$366,872$329,603+$12,959
5$1,021,025$425,477$366,200+$33,752
... years 6-9 hidden
10$1,303,116$767,527$551,540+$183,410
Edit inputs ↑
FAQ
Is it cheaper to rent or buy in Australia?
It depends on your city, property price, interest rates, and how long you plan to stay. In most capital cities, monthly mortgage repayments exceed equivalent rent in the early years. However, buying builds equity through loan repayment and property growth, while renting frees up capital to invest elsewhere.
How does the calculator compare buying and renting?
It projects two paths year-by-year on the same convention: both are valued as if you exited that year. The buying path tracks your home equity (property value minus loan balance), which is capital gains tax free under the main residence exemption, less the cost of selling — agent commission, marketing and conveyancing. The renting path assumes you invest the money you would have spent on a deposit, stamp duty, and legal fees, plus any annual savings from cheaper rent, then charges capital gains tax on that portfolio as if you sold it at the end of the holding period. In the years where rent costs more than the mortgage plus ownership costs, the surplus goes the other way — the buyer invests it, in a portfolio taxed on the same footing as the renter's.
What costs are included in the buying path?
Upfront: deposit, stamp duty (calculated by state), and $2,500 in legal fees. Ongoing: mortgage repayments (principal & interest), council rates, home insurance, maintenance, and strata fees.
What is the break-even year?
The break-even year is when buying wealth (home equity) first exceeds renting wealth (investment portfolio). Before this point, you would have been better off financially renting and investing.
Does stamp duty make a big difference?
Yes. Stamp duty is a major upfront cost that the renter avoids and can invest instead. In NSW, stamp duty on an $800,000 property is over $30,000. This amount, invested at 7% for 10 years, grows to over $59,000.
Does this calculator include capital gains tax?
Yes, on the renting path. Your main residence stays CGT-exempt, so the buying path has no CGT. The renter's investment portfolio does: the calculator assumes it is sold at the end of the holding period and taxes the gain at your marginal rate. Because the 50% CGT discount is abolished from 1 July 2027 (Acts 49 and 50 of 2026), gains are split at that date — growth up to 30 June 2027 keeps the discount, and growth after it has its cost base indexed for CPI and is taxed at the higher of your marginal rate and a 30% minimum. Leaving CGT out can reverse the answer on a 10 or 20 year horizon.
What changes for capital gains tax on 1 July 2027?
Treasury Laws Amendment (Tax Reform No. 1) Act 2026 (No. 49) and the accompanying rates Act (No. 50) abolish the general 50% CGT discount for individuals, trusts and partnerships from 1 July 2027. In its place, assets held at least 12 months get cost base indexation for CPI, and the real gain is subject to a 30% minimum tax under new Division 119. Assets held on 30 June 2027 are deemed disposed of and reacquired, so the gain accrued to that date keeps the old 50% discount and only later growth falls under the new rules. Your main residence is unaffected.

Related guides

CGT Reform and Divorce: What the Relationship Breakdown Rollover Means After 1 July 2027 The marriage-breakdown rollover transfers cost base and acquisition date — after 1 July 2027 it can transfer a deferred gain too. Check before settling. CGT Reform and Holiday Homes: Why the Third Element of Cost Base Matters Most Here CGT reform indexes four of five cost base elements, not the third (ownership costs). Holiday homes rely on that element more than any other property. First Home Buyer Stamp Duty Concessions by State (2025-26) First home buyer stamp duty exemptions and concessions for 2025-26 across NSW, VIC, QLD and WA — thresholds, vacant-land caps and worked savings.

Related calculators

Rentvesting Calculator Buy your home vs rent + invest — state-aware duty, FHOG, depreciation, CGT First Home Buyer Action Plan 3-stage lifecycle: saving / buying / owning. Ranks 12 levers: FHSS, stamp duty concessions, FHOG, LMI waiver, mortgage structure, buying costs, CGT exemption, land tax, offset, refinance Capital Gains Tax Calculator Calculate capital gains tax on shares and property Investment Property Calculator Rental income and negative gearing Mortgage Calculators Repayment, borrowing power, offset, refinance, and more Mortgage Calculator Home loan repayments and extra payments

Tax Accuracy & Sources

Tax year: 2026-27

This calculator uses current stamp duty rates by state. Property growth, rent growth, and investment returns are assumptions — actual results will vary. Capital gains tax on the renter's portfolio IS modelled, assuming the whole portfolio is sold at the end of the holding period and applying the 1 July 2027 reform split (50% discount on growth to 30 June 2027; CPI cost base indexation plus a 30% minimum tax after it). Selling costs on the property ARE modelled, at a default 2.5% of the sale price for agent commission, marketing and conveyancing. It does not account for franking credits or distributions along the way, rental income tax implications, or changes in interest rates over the holding period.

Most searched ↑↓ navigate · ⏎ open