Holding costs when flipping a house in Australia: a 6-month walkthrough

The holding costs when flipping a house in Australia are the quiet ones. They do not show up in the purchase price and they do not show up in the reno quote, so they are the numbers most people leave out of the spreadsheet and then find on the settlement statement. This is a walkthrough of what a real six-month hold costs, line by line, on an ordinary metro flip, so you can budget the carry properly and know what it does to your offer.

I have written a shorter piece on what most Aussie flippers get wrong about holding costs, which is the quick version. This is the long one: the actual six-month timeline, every line filled in, and the two places the number blows out. General information only, not financial advice, but it is the calculation I run before I bid on anything.

The holding costs of flipping a house, line by line

Holding costs are everything it costs to own the property while it is not earning you anything. There are five lines that matter on a standard flip, and one that only applies to some people.

Loan interest. This is the big one, usually more than all the others combined. It is a function of your loan balance and your rate, so the two levers are how much you borrow and how long you hold. I model interest as a straight monthly cost on the loan balance rather than trying to be clever about repayments, because on a short hold you are carrying the debt, not paying it down.

Council rates. Set by your local council against the land value, so they vary a lot by area. As a working range, residential rates run roughly $1,500 to $4,000 a year across the capital-city councils, pro-rated to however long you hold. Get the actual figure off the rates notice or the contract before you rely on it.

Water and sewerage. The catch here is the fixed service charge, which you pay for being connected whether or not anyone is living there. Sydney Water bills a fixed water and wastewater service charge every quarter regardless of usage, so a vacant property mid-reno still generates a bill. Budget the fixed charges, not zero.

Building insurance. Your lender will require it, and an empty property under renovation is not a standard policy, so it is not cheap. A typical home runs somewhere around $1,200 to $2,500 a year, more if the place is vacant for the whole period or mid-structural-work.

Vacancy utilities. Electricity and gas keep charging a daily supply fee even at zero usage, and if you have put a camera on site during the reno, which you should, there is internet too. None of these is large on its own. Together across a six-month hold they are a few hundred dollars nobody budgeted.

The one that only applies to some people is land tax. If you hold in your own name and your total taxable land value sits above the threshold, it applies. In NSW the general land-tax threshold is $1,075,000 of land value, frozen at that level, so a single suburban flip in your own name often sits under it. Hold in a company or trust, or hold more than one property, and the sums change. This is the line to check with your accountant, not to guess.

A 6-month worked example

Here is a cosmetic flip in a metro suburb, held for six months from settlement to the sale proceeds landing.

The assumptions: $650,000 purchase, 80% lending, so a $520,000 loan. For the interest rate I am using 6.2%, which is roughly the average variable owner-occupier rate in mid-2026 with the cash rate holding at 4.35%. Treat that as an assumption and swap in your own rate, because it is the single biggest input and yours will differ.

Just under twenty thousand dollars to hold an ordinary house for six months, and land tax is not even in there. That is money that comes straight off your margin, and it is why a flip that looks like it makes $60,000 on paper is really making closer to $40,000 once the carry and the selling costs are paid.

The interest line is doing most of the work. Borrow more, or hold longer, and this table gets ugly fast. Which brings us to the two things that actually decide the number.

How holding costs change your max offer

Holding costs are not just a budget line, they are an input to your offer. Every dollar of carry is a dollar you cannot pay the vendor and still hit your target margin.

Work it backwards. You start from the resale value, take off your selling costs, your target profit, the reno, and the acquisition costs, and whatever is left is your maximum buy price. Holding costs sit in that stack. So if your carry is $19,800 rather than the $12,000 you first pencilled in, your maximum offer has to drop by about $7,800 to keep the same margin. That is the difference between winning a deal that works and winning a deal that does not.

This is the same logic behind the 70% rule: the buffer between what you pay and the after-repair value has to absorb every cost that is not the reno, and holding is one of the biggest. If the carry eats the buffer, the rule was never really giving you the protection it promised. The cleanest way to see it is to run the deal both ways in the flip ROI calculator and the holding cost calculator, one with your optimistic hold and one with a realistic one, and watch what happens to the max offer.

Stress-testing the timeline

The six-month number above is the optimistic case. The line that breaks it is almost never a cost going up, it is the timeline getting longer, because interest is charged by the day.

Two stretches catch people. The first is the front end. You settle, but the trades do not start the next morning. Between finance disbursement, booking a decent builder and getting materials on site, three or four weeks can pass while the meter runs and nothing is happening. The second is the back end, and it is the bigger one. You finish the reno and list, but average days on market plus a 30-to-42-day settlement means you are often holding for another two to three months after the last tradie leaves.

Run the sensitivity. If that same $520,000 loan is held for nine months instead of six, the interest alone goes from $16,120 to about $24,180, and the total holding cost pushes past $28,000. A three-month blowout, which is completely ordinary in a slow market, adds roughly eight thousand dollars to the deal. That is why I model the hold long, not short. If it pencils on a nine-month timeline it is a real deal, and if it only works on a flawless six-month run, it is a hope.

You can see this play out end to end in the worked sample analysis, where the holding period is one of the inputs the deal score is most sensitive to. And if this is your first flip, the full guide to flipping a house in Australia puts the carry in the context of the whole deal, alongside the other costs beginners forget.

The number to walk in with

Holding costs are boring, which is exactly why they are dangerous. They accrue quietly in the background while you are focused on the kitchen, and they turn up in full on the settlement statement. Budget all five lines, use your own rate rather than a headline one, and model the hold on a timeline that assumes the sale takes longer than you would like. Do that and the carry becomes a line you have already accounted for, instead of the reason a good-looking flip came in flat.

This is general information only and not financial, tax or legal advice. Interest rates, council rates, water charges, insurance premiums and land-tax thresholds change and vary by lender, council and state. The figures here are indicative and current at the time of writing. Always confirm the actual costs for your property and get independent advice before making an offer.

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