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Hold or sell calculator

Keeping it against selling it and doing something else with the money

Selling is not the alternative to keeping. Selling and reinvesting is. So the question is not whether the property makes money, it is whether it makes more than the net proceeds would make somewhere else, once the tax on getting out is paid. This runs both sides over the period you choose, including the rent, the capital growth you actually believe in, and the tax at the end of each.

For: An owner weighing an exit against carrying on

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What you have
£
£
Gearing is what makes holding win on paper: the growth accrues on the whole value while you only funded part of it. Take the mortgage off and the arithmetic changes completely.
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Mortgage type
The balance never moves, so the gearing stays where it is and something has to repay the capital eventually.
£
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Agent, maintenance, voids, insurance, certificates and any service charge. Twenty five to thirty five per cent is realistic on a single let once everything is counted.
What you think will happen
yr
%
The number that decides the whole thing, and the least knowable one on the page. That is why the break-even figure below matters more than the answer above.
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£
A roof, a rewire, a section 20 major works bill on a flat, or the cost of reaching EPC C before October 2030. This is frequently the real reason people are asking the question.
If you sold instead
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Agent and marketing, plus about £1,100 of conveyancing.
£
£
£
Decides both the capital gains rate on the sale and the income tax on the rent if you hold.
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A savings account, an index fund, paying down other debt, or another property. Be honest: if the answer is another property, this is not a hold or sell question, it is a which property question.
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Zero inside an ISA or a pension, and it is the single easiest thing to improve about the alternative. Twenty or forty per cent outside one.
Holding wins over 10 years£35,591Holding ends at £206,966 after selling at the end and paying the tax then; selling now leaves £115,775 to reinvest, which grows to £171,375 at 4.00% net. The two draw level at about 1.7% a year of capital growth, so the real question is whether you believe this property beats that.
£115,775Net proceeds if you sell now
£21,855Tax on selling now
3.6%Holding, annualised
4.0%Reinvesting, annualised
1.7%Break-even growth
Equity today70%Growth and income if held30%
Selling now
Sale price£285,000
Costs of selling−£7,370
Redeeming the mortgage−£140,000
Capital gains tax−£21,855
On a £94,630 gain, payable within 60 days of completion. This is money that leaves the compounding permanently, which is the part people underweight.
Net proceeds£115,775
Reinvested at 4.00% net for 10 years£171,375
5.00% gross less 20% of tax on the return. Inside an ISA or a pension that tax disappears, which is worth £17,210 over the period.
Holding
Cash from letting it£18,338
Over 10 years, after running costs, the mortgage and income tax with the Section 24 restriction applied. Rent growing at 2.50% a year.
What it would be worth£383,016
3.00% a year for 10 years.
Costs of selling then−£9,526
Mortgage to redeem then−£140,000
Capital gains tax then−£44,861
On a larger gain of £190,490, because you have held it longer. The tax is deferred rather than avoided, and it grows with the value.
Holding ends at£206,966
The comparison
Hold£206,966
3.6% a year on the £145,000 of equity you have in it today.
Sell and reinvest£171,375
4.0% a year on the £115,775 you would actually walk away with.
Difference+£35,591
Growth rate at which they draw level1.7%
The property has to grow at more than this for holding to win. You are assuming 3.00%. This is the number to argue about, rather than the answer above: it turns an unknowable forecast into a testable question.
What the tax on selling costs you£21,855
Paid once, immediately, out of the capital that would otherwise compound. Over 10 years at 4.00% that £21,855 would have become £32,351, which is the real cost of crystallising a gain early.
What the gearing is doing49.1%
You own £145,000 of equity but the growth accrues on the whole £285,000. That is why a mortgaged property usually wins this comparison on paper, and why it stops winning the moment the mortgage is repaid or the rate rises far enough to eat the income.
Where these figures come from

Tax. Capital gains at 18% and 24% with a £3,000 annual exemption, split by how much basic rate band your income leaves, and payable within 60 days of completion. Rental income taxed with the Section 24 restriction applied: mortgage interest added back to profit and relieved by a flat 20% credit.

What is not in it. Inheritance tax, which frequently changes the answer entirely on a long hold. Reletting risk, a tenant who stops paying, and the value of not having the job. Transaction costs on whatever you reinvest into.

Both routes are measured on the same basis: sell at the end and pay the tax then, so the deferral of capital gains tax counts in favour of holding exactly as much as it should and no more. Growth is the input that decides the answer and nobody knows it, which is why the break-even growth rate is the more useful number: it converts an unknowable forecast into a question you can actually take a view on. Where the two routes land within a few per cent of each other, the arithmetic is not making this decision and the things it does not model should: whether you want to keep doing the job, what the major works schedule looks like, whether the property will still be lettable in 2030 without spending money on it, and what inheritance tax does to the answer. An estimate, not advice, and not a recommendation to buy or sell anything.

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Sale proceeds

What is left in my hand on each way of selling?

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Capital gains tax

What does the taxman take out of the gain?

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Rental yield

What does a single let actually keep?

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