How to Calculate UK Property Flip Profit
A property flip is a buy-refurb-sell strategy: you purchase a property — often at auction or off-market — refurbish it to add value, and resell at a profit. The concept is straightforward, but the numbers need to be modelled thoroughly before you commit to a purchase. Missing one cost line can turn a profitable deal into a breakeven or a loss.
The true cost of a UK flip
Most flippers focus on the purchase price and refurb cost, but the full picture includes stamp duty (5% on the first £250,000 at additional property rates — £6,000 on a £120,000 purchase), legal fees on both purchase and sale, bridging finance interest, estate agent fees and tax on the gain. On a £120,000 purchase with a £25,000 refurb targeting a £185,000 sale, these costs can easily exceed £20,000 before any profit is taken. This calculator models every line so you see your real net profit upfront.
Bridging finance and holding costs
Bridging loans are typically charged at a monthly rate on the outstanding balance — 0.75% per month is common in 2024–25. On a £120,000 bridge, that's £900/month. Six months of holding costs therefore adds £5,400 before you've sold. Refurb delays, planning complications or slow sale progression all extend the bridge term and erode margins. Build in at least a 10–15% contingency on your refurb estimate and model the worst-case bridge term in the calculator above.
CGT vs income tax on property flips
If you buy and sell properties occasionally, HMRC will typically treat the profit as a capital gain, taxed at 18% (basic rate) or 24% (higher rate) after the £3,000 annual exempt amount. However, if you regularly flip properties as a business activity, HMRC may classify the profits as trading income — subject to income tax at up to 45% plus Class 4 National Insurance. The difference is substantial: a 45% income tax rate on a £30,000 profit costs £13,500, versus £6,480 at 24% CGT. If you plan to flip more than once or twice, take qualified tax advice early.
What makes a good UK flip deal?
Most experienced UK flippers target a minimum net profit of £20,000–£30,000 per deal, or at least 15% ROI on all cash invested. The "70% rule" is a common acquisition heuristic: don't pay more than 70% of the after-repair value (ARV) minus refurb costs. Always source comparable sold prices before committing — use Land Registry data to verify realistic resale values in the area.
Related calculators: Calculate stamp duty at Stamp Duty Calculator. Model your mortgage finance with the Mortgage Calculator. Understand your CGT position at our Capital Gains Tax Calculator.
External references: Zoopla sold prices | HMRC: Trading vs investment property
Property Flip FAQs
How do I calculate profit on a UK property flip?
Net profit = sale price minus all costs: purchase price, stamp duty, legal fees (purchase and sale), survey, refurb, bridging interest, estate agent fees, and CGT or income tax on the gain. Use this calculator to model every line before bidding.
Do I pay CGT or income tax on a flip?
Occasional flips are typically taxed as capital gains (18% or 24%). Regular property flipping as a trade may be taxed as income at up to 45% plus National Insurance. HMRC looks at frequency, intention at purchase, and how quickly you sell when deciding. Get advice if you're planning multiple flips.
What is a good return on a property flip?
Most UK flippers target at least 15–20% ROI on total cash invested and a minimum net profit of £20,000–£30,000 per deal. Below this, the risk — refurb cost overruns, voids, market movement — doesn't justify the capital deployed compared to buy-to-let.
Can I use a buy-to-let mortgage to flip a property?
No — BTL mortgages are not suitable for flipping. They require a minimum tenancy and typically prohibit resale within 6–12 months. Most flippers use bridging finance, which is specifically designed for short-term acquisitions and allows rapid purchase and exit without occupancy requirements.
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