How much profit should a house flip make? The 15% rule

StackCheck · August 2026 · 7 minute read

The headline profit on a flip — resale value minus what you paid minus the refurb — always looks healthy. The profit you actually bank, after stamp duty, finance, holding costs and selling fees, is a different and much smaller number. Knowing the gap before you offer is the whole game.

This guide covers the margin an experienced flipper wants, the costs that quietly eat it, and a full worked example.

The rule of thumb: 15% of GDV

GDV (Gross Development Value) is the price you expect to sell for. A widely used screening rule is that a flip should show a profit of at least 15% of GDV, and at least £15,000 in absolute terms, before you commit.

The costs that eat the headline

On a resale below £250,000 the big four are:

• Stamp duty (SDLT): a flip is an additional property, so you pay the 5% surcharge on every band. Most first-time flippers forget it applies to them too.
• Bridging finance: monthly interest (often 0.7–1% per month) on the day-one loan, plus an arrangement fee of around 2% of the loan. Finance is usually the single largest cost after the works.
• Holding costs: council tax, utilities, insurance and standing charges for every month you own it — typically £200–400 a month.
• Selling costs: estate agent (roughly 1–1.5% + VAT) and sale legal fees.

Worked example

£180,000 purchase, £35,000 refurb, £260,000 GDV, 75% bridging at 0.85%/month, six-month project:

That is a 7.3% margin on GDV — below the 15% bar. The headline "£45,000 profit" (260 − 180 − 35) was real arithmetic and a misleading number: more than half of it was spoken for before you started. Push the refurb £5,000 over, or sell a month late, and the deal is barely worth the risk.

What moves the answer

Four levers decide most flips: a lower purchase price, a realistic (conservative) GDV, a refurb contingency of 10–15% baked in from the start, and a tight timeline — every extra month is more bridging interest and more holding cost. Change any one and the margin swings fast, which is exactly what the StackCheck Flip analyser is built to show: enter your numbers and it stamps the deal stacks, tight or doesn't stack against the 15% rule in seconds.

Common questions

What is a good profit margin on a house flip in the UK?

A common screening rule is a profit of at least 15% of the resale value (GDV) and at least £15,000 in cash, calculated after stamp duty, bridging finance, holding costs and selling fees. The 15% is a buffer against refurb overruns, delays and price softening rather than a target.

Do you pay stamp duty when flipping a house?

Yes. A property bought to flip is an additional property, so in England and Northern Ireland you pay the standard SDLT rates plus the 5% surcharge on every band. It is one of the costs first-time flippers most often overlook.

Is house flipping profit taxed as income or capital gains?

For most people who buy, refurbish and sell, HMRC treats the activity as trading, so the profit is taxed as income (and may attract National Insurance), not as a capital gain. The right treatment depends on your circumstances, so take professional advice.