The Finance AlgorithmTFA

Property Development Feasibility Calculator

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Assess whether a property development project is financially viable. Calculate total development costs, expected profit, and return on investment.

Free to useNo data storedAI insightsUpdated: February 2026

Property development can generate 15-30% returns — or wipe out your savings if the numbers don't stack up. A proper feasibility analysis considers not just land + build costs, but holding costs (interest, rates, insurance), council contributions, GST, selling costs, and contingencies. The general rule: you need a minimum 20% profit margin on total costs to account for unexpected delays, cost overruns, and market movements. This calculator helps you run the numbers before you commit.

Enter Your Details

Enter Your Details

$

Cost of acquiring the development site

$

Total build cost including trades, materials, and project management

How many dwellings you plan to build (e.g. duplex = 2)

$

Expected market value of each completed dwelling

Total time from land purchase to final sale

Type of development affects council fees and holding costs

Affects stamp duty, infrastructure levies, and GST margin scheme

Real-World Examples

Duplex Development — Sydney Hills

Land: $700K. Build (2 townhouses): $550K. Expected sale: $800K each. Duration: 18 months.

Total costs: ~$1.45M (land + build + stamp duty + holding + GST). Revenue: $1.6M. Gross profit: ~$150K. ROI: ~10.3%. Below the 20% threshold — consider whether the numbers work or if you need cheaper land or higher sale prices.

Frequently Asked Questions

Glossary

Feasibility Study
A financial analysis of whether a property development project will generate sufficient profit to justify the risk and capital investment.
Infrastructure Contributions
Council charges levied on developers to fund public infrastructure (roads, parks, services) needed as a result of the development.
GST Margin Scheme
A method of calculating GST on new property where tax is paid only on the developer's margin (sale price minus land cost) rather than the full sale price.

Disclaimer: This calculator provides estimates only and should not be relied upon for financial decisions. Interest rates, fees, and policies change frequently. Always verify information with lenders directly. This is general information, not personal financial advice. Consider seeking advice from a licensed mortgage broker or financial advisor.

Last updated: February 2026

How to Use
  1. Enter the land purchase price.
  2. Estimate total construction costs.
  3. Set the number of dwellings you plan to build.
  4. Add the expected sale price per dwelling.
  5. Choose your project duration and development type.
  6. Review the feasibility analysis: total costs, revenue, profit, and ROI.
Key Information
  • The '20% rule': development profit should be at least 20% of total costs to be viable.
  • Don't forget GST — residential development incurs 10% GST on sale price (margin scheme may reduce this).
  • Council infrastructure contributions can add $20,000-$50,000+ per lot in some councils.
  • Holding costs (interest on development finance, rates, insurance) typically add 8-15% to total project costs.
  • Always include a 10-15% contingency on construction costs.
Pro Tips
  • Get construction quotes from at least 3 builders before committing — costs vary enormously.
  • Check council zoning and development controls BEFORE purchasing the land.
  • Budget for development finance rates (6-10%) not standard home loan rates (5-7%).
  • Time your project to sell in spring/summer when buyer activity peaks.
Avoid These Mistakes
  • Not including GST in the feasibility — on a $750K sale, that's $68K in GST.
  • Underestimating council fees and contributions — some councils charge $50K+ per lot.
  • Ignoring holding costs during construction — 18 months of interest on a $1M development loan adds $90K+.
  • Basing sale prices on today's market without allowing for potential price drops.
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