How do you use the inflation-adjusted property returns calculator?
- Enter the purchase price, the yearly price growth you expect, how long you will hold the property and the inflation rate you want to test.
- Add the monthly rent if you will let it out, and pick new flat or resale for stamp duty. Rent growth, upkeep, selling cost and the government rates are under “Adjust rates and costs”.
- Read your yearly return after inflation. A positive figure means your money grows faster than prices.
What is an inflation-adjusted property return?
It is the yearly return left after rising prices are taken out. If a flat earns 9% a year while prices rise 5% a year, your buying power grows about 3.8% a year, not 9%. The calculator uses the standard formula: real return = (1 + return) ÷ (1 + inflation) − 1.
The return before inflation counts every rupee in and out: the price plus stamp duty and registration on day one, the rent less upkeep each month, and the sale value less selling cost at the end. It is the yearly rate that balances them, often called the IRR.
How the return is worked out
Price + stamp duty + cess + surcharge + registrationRent − upkeep ÷ 12Price × (1 + growth)^years − selling cost(1 + return) ÷ (1 + inflation) − 1Worked example: ₹ 1 crore flat, let out, 10 years
The flat costs ₹ 1,07,60,000 with stamp duty and registration. Rent starts at ₹ 30,000 a month, grows 5% a year and brings in ₹ 39,28,041 after upkeep over 10 years. At 7% growth the flat is worth ₹ 1,96,71,514. That is a return of 8.89% a year before inflation, or 3.70% a year after 5% inflation. The sale value is worth ₹ 1,20,76,603 in today’s money.
Worked example: the same flat, no rent
If you live in it, or it stays empty, the return falls to 6.00% a year before inflation and 0.96% after. At 3% growth with no rent it is −2.82% a year: the flat loses buying power.
How price growth changes the result
| Price growth | Return | After inflation | Value in today’s money |
|---|---|---|---|
| 3% | 5.40% | 0.38% | ₹ 82,50,481 |
| 5% | 7.13% | 2.03% | ₹ 1,00,00,000 |
| 7% | 8.89% | 3.70% | ₹ 1,20,76,603 |
| 9% | 10.67% | 5.40% | ₹ 1,45,33,559 |
What should you keep in mind?
- Growth, rent and inflation are assumptions. Prices vary by locality, and past growth does not set future growth.
- Figures are before tax. Tax on rent and capital gains tax on the sale lower the return; check them with your Chartered Accountant.
- Stamp duty and registration are a large part of the cost. Over a short holding they can wipe out the gain.
Frequently asked questions
Related answers and guides
- Prepay Your Home Loan or Invest the Surplus?
- Pre-Launch EOI Risk: Real Estate Investment Consultant View
- Commercial vs Residential Property Investment: What Changes
- Is It a Good Time to Buy Property in Bengaluru? 2026 Data
Sources
- Karnataka Stamp Act, 1957 and Revenue Department notification RD/46/MNMU/2025 (registration fee 2% from 31 August 2025). Rates verified 18 Oct 2026.
- Real return formula (Fisher relation). Growth, rent and inflation figures are your inputs, not forecasts.
Indicative only and before tax. Verify the tax position with your Chartered Accountant before acting, and confirm stamp duty and registration on Kaveri Online before registering.
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