How much profit should a property development make?

A minimum 20% on total costs is the industry benchmark for a viable project. Below 15%, most developers consider it too risky after accounting for contingencies and potential delays. Large-scale developers target 25-30%.

Do I need to pay GST on property development?

Yes. New residential property attracts GST (10%). You must register for GST and may be able to use the margin scheme (pay GST only on the profit rather than full sale price). Seek tax advice — the GST implications are significant.

§ Tool · tier 2 · independent

Property Development Feasibility Calculator.

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

Live dataFree, no signupOn-deviceupd February 2026

Inputs

Your numbers

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Move the sliders or type in the form on the left — the math updates live as you go. Click Get AI verdict when you want a written analysis.

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.

§ Worked examples

Real-world scenarios

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.

§ FAQ

Questions Australians ask

§ Glossary

Plain-English definitions

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.

§ Pair it with

Related tools

Land Tax Calculator

Calculate ongoing land tax during the development hold period.

Rental Yield Calculator

Compare selling vs holding the completed development as rentals.

Capital Gains Tax Calculator

Estimate CGT liability on development profits.

How to use

01Enter the land purchase price.
02Estimate total construction costs.
03Set the number of dwellings you plan to build.
04Add the expected sale price per dwelling.
05Choose your project duration and development type.
06Review the feasibility analysis: total costs, revenue, profit, and ROI.

Key info

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

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.

Disclaimer: Estimates only. Interest rates, fees and policies change frequently. Always verify with lenders directly. General information, not personal financial advice.

Last updated · February 2026