How this calculator works
Rental yield measures the income a property produces relative to its value. Because NZ rents are quoted weekly, the calculator annualises the weekly rent first, then works out both yields and your cashflow before tax:
Gross yield = (weekly rent × 52 ÷ property value) × 100
Net yield subtracts annual running costs before dividing by the value. Cashflow before tax then takes the annual rent, less those running costs, less the loan interest, to show whether the rent covers the property's ongoing costs in cash terms.
Worked example
Take an $800,000 rental let at $650 a week, with $6,000 a year in running costs, and a $600,000 loan at 6.5%. Annual rent is $33,800, a gross yield of about 4.23%, and a lower net yield once costs come out. Loan interest of $39,000 a year outweighs the rent after costs, so the property runs at a cash shortfall before tax. In New Zealand that loss is ring-fenced, carried forward against future rental income rather than cutting the tax on your wages.
How NZ tax affects the result
- Interest deductibility — fully restored, 100% deductible from 1 April 2025, so interest reduces taxable rental profit.
- Ring-fenced losses — a rental loss cannot offset your salary; it carries forward to future rental income or a taxable sale.
- Bright-line test — a gain on a residential property sold within 2 years of buying (from 1 July 2024) is generally taxable.
- Depreciation — 0% on the building; qualifying chattels can still be depreciated.
A note on accuracy
This calculator works on full, unrounded figures and rounds only for display. It reports yield and pre-tax cashflow, not a full tax computation, and does not model income tax, chattel depreciation, or a taxable sale. Tax rules for landlords change often and depend on your circumstances, so confirm current settings with Inland Revenue or your accountant, and see our methodology for formulas and sources.