Buy at $700,000, spend $90,000 on the renovation, sell at $950,000 after six months, and you’re left with $50,600 before tax and $31,803 after it in Ontario. Put in your own numbers below and see if your flip really pays.
Why does a flip make so much less than the sale price suggests?
A $250,000 gap between what you paid and what you sold for looks generous. It isn’t, because a lot of costs sit in between: interest on the short-term loan, the lender fee, buying costs, months of carrying costs and the commission at sale. Here are the defaults for the $700,000 project.
| Item | Default amount |
|---|---|
| Purchase and renovation | $790,000 |
| Buying costs (2.5% of price) | $17,500 |
| Loan interest and fee | $33,600 |
| Carrying costs (6 months) | $10,800 |
| Selling costs (5% of $950,000) | $47,500 |
| Profit before tax | $50,600 |
What happens if the house sits on the market?
Start with the default flip. The $560,000 loan at 9% costs $25,200 in interest over six months, plus a lender fee of $8,400. Add the other costs and the total, selling included, is $899,400 against a $950,000 sale. That leaves $50,600.
Tax comes next. On top of a taxable income of $90,000 before the flip, Ontario income tax takes $18,797, so you keep $31,803. Since you put in $291,900 of your own cash, the return after tax is 10.8%.
Now let the sale drag on for 14 months. Interest climbs to $58,800 and carrying costs to $25,200. Profit shrinks to $2,600, tax to about $771, and you net $1,829. That’s a lot of work and worry for $1,829, and it’s the reason timing matters as much as price.
The break-even sale price for the default flip is $896,737. The calculator shows it, so you can see how far the market could slip before you lose money.
How is the profit taxed?
The calculator adds the full profit to the income you enter and taxes the lot. That fits a home sold within a year, which it flags as business income. If you held the home longer the treatment can differ, so ask an accountant before you lean on the after-tax figure, since we can’t tell from here which rules apply to you. The capital gains tax calculator shows the other route.
The tax step uses the 2026 federal and provincial brackets for the province you pick, and Ontario is the default. Sell in Alberta or Quebec and the bill will look different.
Does the 70% rule work?
As a first screen, yes. Take 70% of the expected sale price and subtract the repairs, and you get a ceiling for your offer. For the default project that’s $575,000. Treat it as a filter and nothing more. Your real offer should come from the full cost list, and it won’t always match.
Repair budgets grow, and permits take time. The calculator doesn’t model either beyond what you type, so pad the renovation line and the months before you trust a thin margin.
What else should you check?
Every figure except the tax is whatever you enter, and the defaults are examples, not market data. The result is an estimate, and we have no connection with any tax authority or lender.
Once a flip sells, the home sale proceeds calculator shows what lands in your account, and the realtor commission calculator prices the agent. To compare with other uses of your cash, try the ROI calculator.
Frequently asked questions
What is the 70% rule for flipping?
Cap your offer at 70% of the expected sale price minus repairs. On a $950,000 sale with $90,000 of work, that's $575,000.
Why is profit so far below sale price minus purchase price?
Interest, fees, buying costs, carrying costs and commission all come out. On the default flip they add up to $109,400.
How much does a slow sale hurt?
Each month adds loan interest and carrying costs. Going from six months to 14 cuts the default profit from $50,600 to $2,600.
Do I pay tax on the profit?
The calculator adds it to your other income and taxes it at the 2026 Ontario and federal rates. A home sold within 365 days is flagged as business income.
What is the break-even price?
It's the sale price where profit before tax hits zero. For the default flip that's $896,737.
Sources and updates
Updated: . How we check rates · Editorial team · Updates
Estimate only. These figures are a planning estimate, not tax, legal or accounting advice. Tax-Services.ca is an independent publisher: we don't prepare or file tax returns, and we don't offer tax, legal or accounting services. We have no connection with the Canada Revenue Agency, Revenu Québec or any provincial government. Your real amounts depend on details this tool cannot see, so confirm them with an official source or a qualified professional before you act.