What is the Kilroy Curve?

The Kilroy Curve is a model developed by Mark Kilroy that plots how holding costs, rental income and depreciation interact across an Australian property investor's holding period, identifying the years where after-tax cash flow is most pressured.

Is the Kilroy Curve Simulator free to use?

Yes. The Kilroy Curve Simulator is free, runs entirely in the browser, and does not require registration or login.

Does the simulator give personal financial advice?

No. The simulator is an educational and illustrative tool that models scenarios using simplified assumptions. It is not personal financial, taxation or investment advice. For tailored advice, contact Mark Kilroy directly or speak with your accountant.

What inputs can I change in the simulator?

You can adjust interest rate exposure, depreciation strategy, rental growth, holding costs, fixed-rate expiry, property type (new build vs established), tax regime (pre-Budget vs Budget 2026) and the year in the hold when the Budget 2026 changes land. Four presets — Base Case, Tight Market, Rate Shock and Budget 2026 Shock — provide representative starting points.

How does the simulator model the Federal Budget 2026 changes?

When Property Type is set to Established and Tax Regime is set to Budget 2026, the simulator applies a sustained step-down to the curve from the regime change year onward — modelling the loss of wage offset on rental losses for established stock acquired after Budget night, with partial recovery as rent grows. New builds keep the existing rules. The optional dashed line overlays the same scenario under pre-Budget rules so you can see the gap.

Is the Budget 2026 modelling final?

No. The Budget Papers announced the headline change (negative gearing losses on established stock cannot offset wages from 1 July 2027) but the draft legislation has not yet landed. The simulator's most likely assumption is that carried-forward losses can still offset rental income and the capital gain on sale; if the legislation rules that out, the curve gets steeper.

Interactive Tool

The Kilroy Curve Simulator

The Kilroy Curve Simulator is a free interactive tool that models how interest rates, depreciation, rental growth, holding costs and fixed-rate expiry affect an Australian property investor's after-tax outcome during the holding period. It plots the Kilroy Curve — the relationship between recurring costs and cash flow over time — and surfaces the year an asset becomes unholdable without subsidy.

Move the settings. Watch what happens when investors can't hold.

Show pre-Budget curve for comparison

HOLD achieved

Break Rate

11.8%

Interest Rates

Higher rates push the curve downward, making the holding gap deeper and longer.

LowHigh

6.5%

Loan Type

Variable = immediate impact. Fixed = protection until expiry.

Depreciation Available

Depreciation lifts the curve earlier, making the bridge reachable.

Rental Growth

Strong growth lifts the tail of the curve, but does not fix early-stage hold failure.

SlowStrong

2.1% p.a.

Holding Costs

Insurance, land tax, compliance - raises the floor of the holding gap.

LowHigh

50%

Budget 2026 Tax RegimeNew

From 1 July 2027, established stock acquired after Budget night loses the ability to offset rental losses against wages. New builds keep the existing rules. This is the regime shock — model it like a rate shock.

Property Type

Tax Regime

Year in the hold when the regime hits

For a property bought today, Year 1 ≈ 1 July 2027 when the changes start. Buy later in the cycle and the shock lands deeper into the hold.

What this shows

The Kilroy Curve illustrates the holding phase of property investment. After purchase, cash flow typically deteriorates before it improves. This creates a holding gap - a period where costs exceed income and pressure accumulates.

When depreciation is removed or reduced, the curve fails to recover before investors are forced to exit. When exits occur, rental supply is lost. Housing outcomes are shaped here, not at purchase.