The Finance Algorithm

Property Development Feasibility Calculator

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

Updated October 2026Built and checked by MaverickHow it's calculatedReport an error

Your numbers

Updates as you type
$
$600k

Cost of acquiring the development site

$
$450k

Total build cost including trades, materials, and project management

2

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

$
$750k

Expected market value of each completed dwelling

18

Total time from land purchase to final sale

For your records and the AI summary; costs come from the fields below

Sets the stamp duty on the land

%

Your allowance for overruns, as a share of construction

$

Architect, engineers, surveys, development application and certifier fees from quotes

$

Infrastructure contributions from the council's contributions plan for your site

%

Your lender's quote. Defaults to the RBA's average small business variable rate, 9%.

%
$
%

From your selling agent's proposal

$
%

The profit as a share of total costs that you or your financier require

The button asks our AI to explain these figures in words.

Development feasibility: 2 dwellings

Margin on cost

8.3%

target 20%

Gross profit

$114,460

Revenue $1,500,000

Total costs

$1,385,540

all-in

Price for target

$844,000

per dwelling

The high-level picture

The profit as a share of total costs is the margin on cost; a bigger margin leaves more room for overruns and lower sale prices.

$1,500,000Revenue$1,385,540Total costs$114,460Gross profit

Cost composition by category

Each line comes from your inputs; finance interest assumes on average 60% of the peak loan is drawn over the project.

$621,187Acquisition$535,000Construction$111,818Authority & Tax$71,535Holding$46,000Selling
Cost line items
Acquisition
Land purchase
$600,000
Acquisition
Stamp duty (NSW)
$21,187
Construction
Construction
$450,000
Construction
Contingency (10%)
$45,000
Construction
Design, approvals and certification
$40,000
Authority & Tax
Council contributions
$30,000
Holding
Finance interest (9%)
$59,535
Holding
Rates, insurance and utilities
$12,000
Selling
Agent's commission (2%)
$30,000
Selling
Marketing
$16,000
Authority & Tax
GST (margin scheme)
$81,818
Margin on cost: 8.3% against your 20% target
Costs of $1,385,540 against sales of $1,500,000 leave $114,460, 8.3% on cost. That falls short of the 20% margin you set; each dwelling would need to sell for about $844,000 to reach it. The biggest cost group is acquisition. GST assumes the margin scheme applies with the land price as the margin's base; check that with your accountant.

How it works

A development is feasible when the sale proceeds cover every cost with enough margin left to absorb overruns, delays and a softer market. This calculator builds the budget from your own quotes and allowances - land, stamp duty at your state's 2026-27 investor rates, construction and contingency, design and approval fees, council contributions, finance and holding costs, selling costs and GST under the margin scheme - and shows the margin on cost against the target you set, plus the sale price each dwelling would need to reach it.

  1. 1Enter the land price, construction cost, number of dwellings and expected sale price each.
  2. 2Set the project length and the state, which sets the stamp duty on the land.
  3. 3Enter your contingency, professional fees and council contributions from quotes and the council's plan.
  4. 4Enter the finance rate and how much you'll borrow, plus yearly holding costs.
  5. 5Enter the agent's commission, marketing and the margin on cost you're aiming for.

The figures today

The average new owner-occupier home loan was $842,000 in NSW and $664,000 in Victoria in the June quarter 2026, from the ABS. A two-bedroom unit on a new lease in NSW rents for a typical $785 a week.

House prices and loan sizesRents by postcode

Worked examples

Duplex in NSW

Land $700,000. Building two dwellings for $550,000, selling for $800,000 each over 18 months. Default allowances for fees, finance and selling costs.

Land purchase price
$700,000
Estimated construction cost
$550,000
Number of dwellings
2
Expected sale price (per dwelling)
$800,000
Project duration (months)
18
Development type
Duplex
State
NSW
Construction contingency
10%
Design, approvals and certification
$40,000
Council contributions (total)
$30,000
Development finance rate
9%
Share of land and build borrowed
70%
Rates, insurance and utilities a year
$8,000
Agent's commission
2%
Marketing per dwelling
$8,000
Target margin on cost
20%

Costs come to $1,613,380 against $1,600,000 of sales, a $13,380 loss (-0.8% on cost). After land and construction, the biggest items are GST under the margin scheme ($81,818), finance interest ($70,875) and the contingency ($55,000). Each dwelling would need to sell for about $994,000 to reach a 20% margin on cost.

Questions people ask

How much profit should a property development make?
There's no fixed rule. Developers and lenders each set the margin on cost they need to cover the risk of overruns, delays and price falls, and it varies with the project and the market. Set your own target and use the price-for-target figure to see how much room you have.
Do I need to pay GST on property development?
Selling new residential premises is generally a taxable supply, so a developer carrying on an enterprise needs to be registered for GST. If you're eligible and the buyer agrees in writing, the margin scheme lets you pay GST on the margin - the sale price less what you paid for the land - instead of the full price. Get tax advice for your project.

The terms, in plain English

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 way of working out GST on property where GST is one-eleventh of the margin - the sale price less the purchase price - instead of one-eleventh of the full price. It needs the buyer's written agreement.

Official sources

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.