diff --git a/.idea/.idea.Pinta/.idea/.gitignore b/.idea/.idea.Pinta/.idea/.gitignore
new file mode 100644
index 0000000000..b23b929ada
--- /dev/null
+++ b/.idea/.idea.Pinta/.idea/.gitignore
@@ -0,0 +1,13 @@
+# Default ignored files
+/shelf/
+/workspace.xml
+# Rider ignored files
+/projectSettingsUpdater.xml
+/modules.xml
+/.idea.Pinta.iml
+/contentModel.xml
+# Editor-based HTTP Client requests
+/httpRequests/
+# Datasource local storage ignored files
+/dataSources/
+/dataSources.local.xml
diff --git a/.idea/.idea.Pinta/.idea/indexLayout.xml b/.idea/.idea.Pinta/.idea/indexLayout.xml
new file mode 100644
index 0000000000..7b08163ceb
--- /dev/null
+++ b/.idea/.idea.Pinta/.idea/indexLayout.xml
@@ -0,0 +1,8 @@
+<?xml version="1.0" encoding="UTF-8"?>
+<project version="4">
+  <component name="UserContentModel">
+    <attachedFolders />
+    <explicitIncludes />
+    <explicitExcludes />
+  </component>
+</project>
\ No newline at end of file
diff --git a/.idea/.idea.Pinta/.idea/vcs.xml b/.idea/.idea.Pinta/.idea/vcs.xml
new file mode 100644
index 0000000000..35eb1ddfbb
--- /dev/null
+++ b/.idea/.idea.Pinta/.idea/vcs.xml
@@ -0,0 +1,6 @@
+<?xml version="1.0" encoding="UTF-8"?>
+<project version="4">
+  <component name="VcsDirectoryMappings">
+    <mapping directory="" vcs="Git" />
+  </component>
+</project>
\ No newline at end of file
diff --git a/Pinta.Core/Classes/Rectangle.cs b/Pinta.Core/Classes/Rectangle.cs
index f360ef70e1..9bf9d4089a 100644
--- a/Pinta.Core/Classes/Rectangle.cs
+++ b/Pinta.Core/Classes/Rectangle.cs
@@ -53,7 +53,7 @@ public RectangleD (in PointD point, double width, double height)
 	/// </summary>
 	/// <param name="invert_if_negative">
 	/// Flips the start and end points if necessary to produce a rectangle with positive width and height.
-	/// Otherwise, a negative width or height is clamped to zero.
+	/// Otherwise, a negative width or height is allowed.
 	/// </param>
 	public static RectangleD FromPoints (in PointD start, in PointD end, bool invert_if_negative = true)
 	{
@@ -63,9 +63,9 @@ public static RectangleD FromPoints (in PointD start, in PointD end, bool invert
 			double x1 = Math.Min (start.X, end.X);
 			double x2 = Math.Max (start.X, end.X);
 			return new RectangleD (x1, y1, x2 - x1, y2 - y1);
-		} else {
-			return new RectangleD (start.X, start.Y, end.X - start.X, end.Y - start.Y);
 		}
+
+		return new RectangleD (start.X, start.Y, end.X - start.X, end.Y - start.Y);
 	}
 
 	public static readonly RectangleD Zero;
diff --git a/Pinta.Tools/Handles/RectangleHandle.cs b/Pinta.Tools/Handles/RectangleHandle.cs
index c6df2794fa..52c6da8cf5 100644
--- a/Pinta.Tools/Handles/RectangleHandle.cs
+++ b/Pinta.Tools/Handles/RectangleHandle.cs
@@ -18,7 +18,9 @@ public class RectangleHandle : IToolHandle
 	private readonly MoveHandle[] handles = new MoveHandle[8];
 	private MoveHandle? active_handle = null;
 	private PointD? drag_start_pos = null;
+	private PointD drag_offset_from_handle = PointD.Zero;
 	private double aspect_ratio = 1;
+	public Matrix Transform { get; set; } = CairoExtensions.CreateIdentityMatrix ();
 
 	public RectangleHandle ()
 	{
@@ -87,6 +89,11 @@ public RectangleD Rectangle {
 		}
 	}
 
+	/// <summary>
+	/// Corrects the rectangle if the point meant to be the bottom right corner is above or to the left of the point meant to be the top left corner.
+	/// </summary>
+	public void CorrectRectangle () => Rectangle = RectangleD.FromPoints (start_pt, end_pt);
+
 	/// <summary>
 	/// Begins a drag operation if the mouse position is on top of a handle.
 	/// Mouse movements are clamped to fall within the specified image size.
@@ -106,6 +113,7 @@ public bool BeginDrag (in PointD canvas_pos, in Size image_size)
 			return false;
 
 		drag_start_pos = view_pos;
+		drag_offset_from_handle = new PointD (canvas_pos.X - active_handle.CanvasPosition.X, canvas_pos.Y - active_handle.CanvasPosition.Y);
 		return true;
 	}
 
@@ -121,8 +129,8 @@ public RectangleI UpdateDrag (PointD canvas_pos, ConstrainType constrain = Const
 
 		// Clamp mouse position to the image size.
 		canvas_pos = new PointD (
-			Math.Round (Math.Clamp (canvas_pos.X, 0, image_size.Width)),
-			Math.Round (Math.Clamp (canvas_pos.Y, 0, image_size.Height)));
+			Math.Round (Math.Clamp (canvas_pos.X - drag_offset_from_handle.X, 0, image_size.Width)),
+			Math.Round (Math.Clamp (canvas_pos.Y - drag_offset_from_handle.Y, 0, image_size.Height)));
 
 		var dirty = InvalidateRect;
 
@@ -162,7 +170,6 @@ public void EndDrag ()
 		var rect = Rectangle;
 		start_pt = rect.Location ();
 		end_pt = rect.EndLocation ();
-		Console.WriteLine($"Start: {start_pt}, End: {end_pt}");
 	}
 
 	/// <summary>
@@ -171,7 +178,7 @@ public void EndDrag ()
 	public string? GetCursorAtPoint (PointD view_pos)
 		=> handles.FirstOrDefault (c => c.ContainsPoint (view_pos))?.CursorName;
 
-	private void UpdateHandlePositions ()
+	public void UpdateHandlePositions ()
 	{
 		var rect = Rectangle;
 		var center = rect.GetCenter ();
@@ -183,6 +190,12 @@ private void UpdateHandlePositions ()
 		handles[5].CanvasPosition = new PointD (center.X, rect.Top);
 		handles[6].CanvasPosition = new PointD (rect.Right, center.Y);
 		handles[7].CanvasPosition = new PointD (center.X, rect.Bottom);
+		foreach (var handle in handles) {
+			double x = handle.CanvasPosition.X;
+			double y = handle.CanvasPosition.Y;
+			Transform.TransformPoint (ref x, ref y);
+			handle.CanvasPosition = new PointD (x, y);
+		}
 	}
 
 	private void UpdateHandleUnderPoint (PointD view_pos)
@@ -193,13 +206,11 @@ private void UpdateHandleUnderPoint (PointD view_pos)
 		// at the same position so pick the bottom right corner.
 		var rect = Rectangle;
 		if (active_handle is not null && rect.Width == 0.0 && rect.Height == 0.0)
-			active_handle = handles[3];
+			active_handle = handles[(int)HandleIndex.BottomRight];
 	}
 
 	private void MoveActiveHandle (double x, double y, ConstrainType constrain = ConstrainType.None)
 	{
-		// Update the rectangle's size depending on which handle was dragged.
-		Console.WriteLine((HandleIndex)Array.IndexOf (handles, active_handle));
 		switch ((HandleIndex)Array.IndexOf (handles, active_handle)) {
 			case HandleIndex.TopLeft:
 				start_pt = new (x, y);
diff --git a/Pinta.Tools/Tools/BaseTransformTool.cs b/Pinta.Tools/Tools/BaseTransformTool.cs
index 8bddd68ea6..0ccfd23410 100644
--- a/Pinta.Tools/Tools/BaseTransformTool.cs
+++ b/Pinta.Tools/Tools/BaseTransformTool.cs
@@ -37,6 +37,7 @@ public abstract class BaseTransformTool : BaseTool
 {
 	private readonly int rotate_steps = 32;
 	private readonly Matrix transform = CairoExtensions.CreateIdentityMatrix ();
+	private Matrix stored_handle_transform = CairoExtensions.CreateIdentityMatrix ();
 	private RectangleD source_rect;
 	private PointD original_point;
 	private PointD rect_original_point;
@@ -106,6 +107,7 @@ protected override void OnMouseMove (Document document, ToolMouseEventArgs e)
 		var constrain = e.IsShiftPressed;
 
 		transform.InitIdentity ();
+		rect_handle.Transform.InitMatrix (stored_handle_transform);
 
 		if (is_scaling) {
 			rect_handle.UpdateDrag (e.PointDouble, constrain ? ConstrainType.AspectRatio : ConstrainType.None);
@@ -115,6 +117,7 @@ protected override void OnMouseMove (Document document, ToolMouseEventArgs e)
 			var sx = (source_rect.Width > 0) ? (target_rect.Width / source_rect.Width) : 0.0;
 			var sy = (source_rect.Height > 0) ? (target_rect.Height / source_rect.Height) : 0.0;
 
+			//transform.Multiply (rect_handle.Transform);
 			transform.Translate (target_rect.Left, target_rect.Top);
 			transform.Scale (sx, sy);
 			transform.Translate (-source_rect.Left, -source_rect.Top);
@@ -136,8 +139,11 @@ protected override void OnMouseMove (Document document, ToolMouseEventArgs e)
 			transform.Translate (center.X, center.Y);
 			transform.Rotate (-angle);
 			transform.Translate (-center.X, -center.Y);
-			//TODO: the handle should rotate with the selection rather than just resizing to fit the new bounds
-			rect_handle.Rectangle = document.Selection.SelectionPath.GetBounds ().ToDouble ();
+
+			rect_handle.Transform.Translate (center.X, center.Y);
+			rect_handle.Transform.Rotate (-angle);
+			rect_handle.Transform.Translate (-center.X, -center.Y);
+			rect_handle.UpdateHandlePositions ();
 		} else {
 			// The cursor position can be a subpixel value. Round to an integer
 			// so that we only translate by entire pixels.
@@ -145,7 +151,8 @@ protected override void OnMouseMove (Document document, ToolMouseEventArgs e)
 			var dx = Math.Floor (e.PointDouble.X - original_point.X);
 			var dy = Math.Floor (e.PointDouble.Y - original_point.Y);
 			transform.Translate (dx, dy);
-			rect_handle.Rectangle = new RectangleD(rect_original_point.X + dx, rect_original_point.Y + dy, rect_handle.Rectangle.Width, rect_handle.Rectangle.Height);
+			rect_handle.Transform.Translate (dx, dy);
+			rect_handle.UpdateHandlePositions ();
 		}
 
 		OnUpdateTransform (document, transform);
@@ -215,6 +222,7 @@ protected virtual void OnStartTransform (Document document)
 	{
 		source_rect = GetSourceRectangle (document);
 		transform.InitIdentity ();
+		stored_handle_transform.InitMatrix (rect_handle.Transform);
 	}
 
 	protected virtual void OnUpdateTransform (Document document, Matrix transform)
@@ -227,6 +235,8 @@ protected virtual void OnFinishTransform (Document document, Matrix transform)
 		is_rotating = false;
 		is_scaling = false;
 		using_mouse = false;
+
+		stored_handle_transform.Multiply (rect_handle.Transform);
 	}
 
 	protected override void OnAfterUndo (Document document)
@@ -256,6 +266,8 @@ private void HandleSourceRectangleChanged (Document document)
 	{
 		var dirty = rect_handle.InvalidateRect;
 		rect_handle.Rectangle = GetSourceRectangle (document);
+		rect_handle.Transform.InitIdentity ();
+		rect_handle.UpdateHandlePositions ();
 		dirty = dirty.Union (rect_handle.InvalidateRect);
 		PintaCore.Workspace.InvalidateWindowRect (dirty);
 	}
diff --git a/Pinta.Tools/Tools/MoveSelectedTool.cs b/Pinta.Tools/Tools/MoveSelectedTool.cs
index e16fd1414d..7a96e0d1ae 100644
--- a/Pinta.Tools/Tools/MoveSelectedTool.cs
+++ b/Pinta.Tools/Tools/MoveSelectedTool.cs
@@ -126,7 +126,7 @@ protected override void OnFinishTransform (Document document, Matrix transform)
 		if (hist != null)
 			document.History.PushNewItem (hist);
 
-		rect_handle.Rectangle = RectangleD.FromPoints (rect_handle.Rectangle.Location (), rect_handle.Rectangle.EndLocation ());
+		rect_handle.CorrectRectangle();
 
 		hist = null;
 		original_selection = null;
diff --git a/Pinta.Tools/Tools/MoveSelectionTool.cs b/Pinta.Tools/Tools/MoveSelectionTool.cs
index fc772b53e8..65c85d22e2 100644
--- a/Pinta.Tools/Tools/MoveSelectionTool.cs
+++ b/Pinta.Tools/Tools/MoveSelectionTool.cs
@@ -36,7 +36,6 @@ public sealed class MoveSelectionTool : BaseTransformTool
 
 	public MoveSelectionTool (IServiceManager service) : base (service)
 	{
-		rect_handle.InvertIfNegative = true;
 	}
 
 	public override string Name => Translations.GetString ("Move Selection");
diff --git a/Pinta.Tools/Tools/SelectTool.cs b/Pinta.Tools/Tools/SelectTool.cs
index 9f2e872b67..213705156c 100644
--- a/Pinta.Tools/Tools/SelectTool.cs
+++ b/Pinta.Tools/Tools/SelectTool.cs
@@ -233,8 +233,7 @@ private void AfterSelectionChange (object? sender, EventArgs event_args)
 	/// </summary>
 	private void LoadFromDocument (Document document)
 	{
-		var selection = document.Selection;
-		handle.Rectangle = RectangleD.FromPoints (selection.Origin, selection.End);
+		handle.Rectangle = document.Selection.SelectionPath.GetBounds ().ToDouble ();
 		ShowHandles (document.Selection.Visible && tools.CurrentTool == this);
 	}
 }