Flip or Renovate

Fix it and sell it, or fix it and keep it. This calculator compares both paths in dollars: the all-in cost of buying, carrying, and renovating, against the price you expect once the work is done.

What it answers

• The all-in pre-tax cost of the project: purchase price, renovation budget, and carrying costs (financing interest, property tax, and insurance) while you hold it.
• The cash profit before tax if you sell after the renovation, your return on the cash you actually put in, and the break-even sale price below which the flip loses money.
• A warning if your holding period is under 365 days, which changes how the CRA taxes the sale.

What it deliberately does not cover

This calculator has 8 inputs and no others: purchase price, renovation budget, expected sale price, holding period, financing rate, selling commission, and monthly property tax and insurance while you hold. It does not ask for a province, and it does not compute land transfer tax or legal fees anywhere — those are excluded from the all-in cost entirely, not estimated. It also does not compute any tax on the profit — no capital-gains math, no business-income math, no marginal rate. The only tax-related output is a warning note when your holding period is under 12 months, pointing you to the CRA's flipping rule. It does not estimate renovation costs, model HST/GST on contractor invoices, model the market moving mid-project, permit delays, or your own labour — it treats your time as free. It is not.

Every input, explained

Purchase price. The agreed price on the offer, not the asking price — enter the real number.

Renovation budget. Materials plus labour plus contingency. Most people enter the contractor's quote and skip the 10 to 15 percent contingency — until rot shows up.

Holding period (months). Time from purchase to sale. It drives the carrying-interest calculation directly, and under 12 months triggers the CRA flipping-rule warning in the results.

Financing rate (%). The rate this calculator assumes for carrying the purchase price plus the renovation budget for the whole holding period — it is not necessarily your mortgage rate; it is whatever rate applies to the capital tied up.

Selling commission (%). Applied to the expected sale price to get selling costs. Commission is negotiable in Canada — enter what you actually agreed, not a default.

Property tax / month and Insurance / month. Two separate carrying-cost lines, each multiplied by the holding period. The calculator does not infer these from the purchase price — you supply your own numbers.

Expected sale price. Base it on sold comparables for renovated homes nearby, not on listings. Your realtor can pull these. This is also the input the breakeven-sale-price output (below) is compared against.

How the math works

Carrying interest = (purchase price + renovation budget) × financing rate × (holding months ÷ 12) — the calculator assumes the full purchase-plus-reno amount is financed for the entire hold. Carrying property tax = monthly property tax × holding months; carrying insurance = monthly insurance × holding months. All-in cost = purchase price + renovation budget + carrying interest + carrying property tax + carrying insurance. Selling costs = sale price × commission percent. Profit = sale price − all-in cost − selling costs — entirely before tax. Return on cash invested = profit ÷ (renovation budget + carrying costs), on the theory that the purchase itself is financed and your real cash outlay is the reno plus what it cost to carry the property.

If your holding period is under 12 months, the results add a note about the CRA's flipping rule — since 2023, a property sold within 365 days of purchase is taxed as business income at 100 percent inclusion, with no principal residence exemption, unless a listed life-event exception applies (death, separation, job relocation, disability, insolvency). That note is a warning, not a computation: the calculator does not estimate the tax bill itself.

Worked example

Using the calculator's own default inputs: purchase price $500,000, renovation budget $80,000, expected sale price $650,000, 9 months held, 6.5% financing rate, 5% commission, $550/month property tax, $150/month insurance.

• Carrying interest: ($500,000 + $80,000) × 6.5% × (9 ÷ 12) = $28,275.
• Carrying property tax: $550 × 9 = $4,950. Carrying insurance: $150 × 9 = $1,350. Total carrying: $34,575.
• All-in cost: $500,000 + $80,000 + $34,575 = $614,575.
• Selling costs: $650,000 × 5% = $32,500.
• Profit: $650,000 − $614,575 − $32,500 = $2,925, before tax.
• Cash invested (reno + carrying): $80,000 + $34,575 = $114,575; return on cash: $2,925 ÷ $114,575 ≈ 2.55%.

Because the holding period is 9 months (under 12), the calculator flags the CRA flipping rule — the full $2,925 profit, whatever it works out to after any real-world tax analysis, would be taxed as business income, not a capital gain, unless a listed exception applies. Note this calculator doesn't compute that tax; it only warns you to check it.

Applying the breakeven-sale-price output (added below): with everything else held the same, the sale price would need to be at least $646,921 just to break even before tax — $3,079 below the $650,000 assumed sale price. At $650,000, this flip clears breakeven by a slim margin; a sale price even a few percent lower would flip the small profit into a loss.

Land transfer tax and legal fees are not included

This calculator has no province input and does not compute land transfer tax, welcome tax, or legal fees on either the purchase or the sale — its "all-in cost" is purchase price, renovation, and carrying costs only. In real life those closing costs are real money: Ontario, BC, and Quebec in particular charge meaningful land transfer or welcome tax, and legal fees run into the thousands on both ends of the deal. For a province-specific number, use the site's Land Transfer Tax calculator on the purchase side, and fold that figure (plus your own estimate of legal fees) into your own read of the all-in cost this calculator produces — it will not do it for you.

Questions to ask a professional

1. Ask your tax pro: "My hold is close to the 365-day line — exactly how is that measured, and do any life-event exceptions apply to me?"
2. Ask your lawyer: "What will land transfer tax and legal fees actually cost me on this purchase and sale, since this calculator doesn't include them?"
3. Ask your mortgage broker: "How will you finance the renovation — purchase-plus-improvements with draws, or a separate loan — and what does each cost in fees and rate?"
4. Ask your realtor: "Show me renovated homes sold within a kilometre in the last 90 days. What is the realistic post-reno price, not the optimistic one?"