Total Development Cost (TDC) in Australia Explained

Total Development Cost (TDC) is the sum of every cost it takes to get a site from a purchase contract to settled sales: the land, the duty and acquisition costs, the consultants, construction and its contingency, statutory charges and contributions, the cost of holding the land while you wait, sales and marketing, and the finance that funds the lot. It is the single largest number in your feasibility, and the one most often understated. Get the Total Development Cost (TDC) wrong and every metric built on top of it, your margin, your Loan to Cost (LTC) ratio, the land price you can justify, is wrong too.

This guide walks the full cost stack line by line, flags the items developers most often leave out, and shows how the same number is treated differently depending on who is asking. A planner asking for your “estimated development cost” wants something quite specific and quite different from the figure your financier wants. The rules that drive several of these line items, duty, land tax, infrastructure contributions, vary by state, so this guide covers New South Wales (NSW), Victoria (VIC), Queensland (QLD) and the smaller states and territories, plus New Zealand (NZ) where it is relevant.

What is total development cost (TDC)?

Total Development Cost (TDC) is the complete cost of delivering a development, from acquiring the site through to selling the finished product. In a feasibility it is the denominator against which you measure profit and the base your lender sizes debt against. Everything you spend, other than the profit you hope to keep, belongs somewhere in it.

The line items group into roughly nine buckets:

• Land and acquisition costs: the purchase price plus transfer (stamp) duty, legal fees, due diligence and valuations.
• Professional and consultant fees: architect or building designer, town planner, engineers, surveyor, Quantity Surveyor (QS), certifier and the rest of the consultant team.
• Construction costs: the builder’s price, including preliminaries, demolition and site preparation.
• Contingency: a reserve for the overruns you cannot itemise yet.
• Statutory fees and infrastructure contributions: Development Application (DA) fees, council and state contributions, and utility headworks.
• Land holding costs: land tax, council rates, insurance and security across the holding period.
• Sales and marketing costs: agent commission, marketing campaign, display suite and sale legals.
• Finance costs: interest plus the establishment, line and exit fees a lender charges.
• Goods and Services Tax (GST): handled as a cashflow item rather than a permanent cost, covered in its own section below.

A practical default is to model every cost line excluding Goods and Services Tax (GST), because a registered developer generally reclaims the Goods and Services Tax (GST) paid on costs as an input tax credit. More on that below. The point to hold onto now is that Total Development Cost (TDC) is a build-up, not a single quote. The land price and the builder’s tender are the two biggest pieces, but they are rarely more than 70 per cent of the total between them. The remaining lines are where feasibilities quietly leak.

What is the difference between total development cost and total project cost?

The difference is finance. The cleanest practice is to build your development costs first, land through to sales and marketing, and treat finance as a separate layer on top. Add the two together and you have what is often called the total project cost.

This split matters because it keeps comparisons honest. Finance costs depend on how you fund the deal, not on the bricks. Two developers building the identical scheme on the identical site can carry very different finance bills depending on their equity, their Loan to Value Ratio (LVR), and whether interest is capitalised or serviced. If you bury finance inside one undifferentiated number, you cannot see whether a thin margin is a construction problem or a funding-structure problem.

A well-built feasibility model reports a development-costs figure (land, acquisition, professional fees, construction, contingency, infrastructure and authority charges, land holding, marketing and non-settlement sales costs) separately from finance, then adds the two to a total project cost. That is why you will sometimes see a “margin on cost (pre-funding)” and a “margin on cost (post-funding)” reported side by side: the first measures the scheme, the second measures the scheme as you have chosen to fund it.

Loosely, people use “total development cost” to mean either figure, so when someone quotes you a Total Development Cost (TDC), the first question to ask is whether finance is in or out. For a lender sizing a facility on a Loan to Cost (LTC) basis, it usually is. For a quick development margin on the build, it often is not. Neither is wrong, but mixing them is.

How is Total Development Cost (TDC) different from the planning estimated development cost?

They measure different things, and confusing them is a common and expensive mistake. Your feasibility Total Development Cost (TDC) is what the project costs you. A planning authority’s “estimated development cost” is a narrower, defined figure used to set application fees and decide which approval pathway a project follows. It is deliberately not your feasibility number.

In New South Wales (NSW) the term is now estimated development cost, which from 2024 replaced the older “cost of development” and “capital investment value” across the planning system. The New South Wales (NSW) Department of Planning is explicit that an estimated development cost report captures only the cost to carry out the development: designing and erecting the building and associated infrastructure, carrying out work, demolition, and fixed or mobile plant. It specifically excludes land costs, Goods and Services Tax (GST), developer contributions and planning agreement costs, and ongoing operating and maintenance costs. Projects with an estimated development cost over $3 million must lodge a report prepared by a chartered Quantity Surveyor (QS), under the changes set out in New South Wales (NSW) planning circular PS 25-004.

So the planning figure strips out the land (often your single biggest cost), strips out Goods and Services Tax (GST), and strips out the contributions that can run to tens of thousands of dollars per dwelling. A scheme with a $1.4 million site, a $2.8 million build and $120,000 of contributions might show an estimated development cost near $2.8 million for fee purposes, and a feasibility Total Development Cost (TDC) closer to $5.3 million once everything is in. Every state runs some version of a “cost of works” figure to set Development Application (DA) fees, so wherever you build, keep the planning cost figure and the feasibility cost figure in separate columns. Use the planning one to work out your application fees and pathway, and the feasibility one to work out whether the deal stacks up.

What goes into each line of your Total Development Cost (TDC)?

What does land actually cost, beyond the purchase price?

The purchase price is rarely the full land cost. Transfer (stamp) duty, legal fees, due diligence and a valuation can add several per cent on top, and on a multi-million dollar site that runs to real money.

The biggest add-on in most states is transfer duty (still widely called stamp duty). It is a state tax on the dutiable value of the land, and on commercial-scale sites it is typically the largest single acquisition cost after the price itself. Duty is charged on a sliding scale that differs in every state, so check the figure against the relevant revenue office for your jurisdiction rather than carrying a rule of thumb. Foreign purchaser surcharges add a further layer in most states for foreign-controlled buyers. New Zealand (NZ) is the clean exception: it has no stamp duty, so a New Zealand (NZ) acquisition budget skips this line entirely.

A point on tooling, because it trips people up. A feasibility platform models duty as a cost line you enter; it generally does not work the figure out for you. To get the number, use a state revenue office calculator or a standalone tool such as Feasly’s stamp duty calculator, then bring the result into your feasibility as a cost line. The other acquisition lines, conveyancing and legal fees, building and pest or dilapidation reports, survey, and a valuation for the financier, are smaller but real, and tend to be paid from equity early, before any debt is drawn.

Land also sets up the back-solve that drives most acquisition decisions. If you start from a target margin and a known Gross Realisation Value (GRV), the maximum land price you can pay is whatever is left after every other cost, which is your Residual Land Value (RLV). The land line and the rest of the Total Development Cost (TDC) are two ends of the same calculation.

How much should I allow for professional and consultant fees?

Professional fees commonly run from around 8 to 15 per cent of construction cost across the full consultant team, though the range is wide and depends on the complexity of the build and the approval pathway. They are easy to underestimate because they arrive as a dozen separate engagements rather than one tender.

The usual cast includes the architect or building designer, a town planner, a Quantity Surveyor (QS), structural, civil and services engineers, a land surveyor, a certifier or private certifier, and specialist consultants such as acoustic, traffic, bushfire or heritage where the site demands them. As a rough split, architectural fees might typically sit around 2 to 8 per cent of construction depending on complexity, with each engineering discipline a further 1 to 3 per cent, and the Quantity Surveyor (QS) often under 2 per cent. These are indicative only; get quotes for your scheme. For the line items that swing the most, the fees a town planner charges and the choice between an architect and a building designer are both worth understanding before you budget them.

A common trap is treating professional fees as a fixed lump booked at the start. In reality they spread across the program, some at acquisition, most through design and approvals, and a tail running into construction, which matters once you phase the costs into a cashflow.

Why is the builder’s price not the whole construction number?

The builder’s tender is the largest part of construction cost, but it is not the whole of it. A full construction line also picks up preliminaries (site establishment, cranes, temporary services, site management), demolition and site preparation, any works outside the building envelope, and an allowance for cost escalation if you are building in future periods.

Construction is usually 50 to 70 per cent of Total Development Cost (TDC), so small percentage errors here move the whole feasibility. Early on, the right basis is a Quantity Surveyor’s (QS) elemental estimate rather than a single rate, built to the Australian Institute of Quantity Surveyors (AIQS) practice standards. Square-metre rates from a source like the Rawlinsons Australian Construction Handbook are useful for a first-pass sanity check, but they are market averages and your real number depends on site, design and the state of the market. Treat any single rate as indicative until a Quantity Surveyor (QS) has priced your drawings.

How you contract the build also changes the certainty of this line. A fixed-price guaranteed maximum price (GMP) contract shifts more cost risk to the builder and narrows your contingency, while a more open arrangement leaves more risk (and more potential upside) with you. The choice of builder sits behind the number too: the cheapest tender is not always the cheapest outcome once variations and delays are counted.

How much contingency should Total Development Cost (TDC) include, and on what base?

A construction contingency of around 5 to 10 per cent of construction cost is a common allowance, leaning to the higher end early in design when the drawings are still loose, and tightening as the scope firms up and the contract is signed. Some developers carry 10 to 15 per cent on complex or refurbishment projects where hidden conditions are likely.

The base you apply the percentage to matters as much as the percentage. Contingency is normally calculated on construction cost, sometimes on construction including or excluding Goods and Services Tax (GST), so be clear which you mean. In most feasibility models contingency sits as a single line at the foot of the construction section: a percentage applied to construction costs (on either an excluding or including Goods and Services Tax (GST) basis), and it is never itself taxed, because a reserve is not a supply. The number is not padding. It is the difference between absorbing a variation and stalling the job, and a contingency that is too thin is one of the most common reasons a feasibility that looked fine on paper runs short of funds late in the build.

What statutory fees and contributions go into Total Development Cost (TDC), and how do they vary by state?

Expect two kinds of government charge: the application fees you pay to lodge and assess the development, and the much larger infrastructure contributions you pay for the demand your project puts on roads, drainage, open space and community facilities. The contributions are where the state-by-state variation really bites, and they are routinely understated in early feasibilities.

In New South Wales (NSW), local contributions are levied under sections 7.11 and 7.12 of the Environmental Planning and Assessment Act. A section 7.11 contribution is demand-based, charged per dwelling, lot, person or square metre under a council’s contributions plan, and is capped at $30,000 per lot or dwelling in many greenfield areas and $20,000 elsewhere. A section 7.12 levy is a flat percentage of the cost of works, up to 1 per cent where the cost of works exceeds $200,000. Larger schemes may also face state and regional contributions on top.

In Victoria (VIC), growth-area projects can attract the Growth Areas Infrastructure Contribution (GAIC), administered by the State Revenue Office (SRO). For 2025 to 2026 the top rate (Type C land) is around $141,150 per hectare, and the rate is indexed each 1 July, so confirm the current figure before you rely on it. Most established-area councils also run development contributions plans or infrastructure contributions plans of their own.

In Queensland (QLD), councils levy adopted infrastructure charges, set per dwelling or per use up to a maximum the state government caps in the planning regulation. Brisbane City Council’s infrastructure charges are a worked example of how this is applied, and water and sewer headworks can be billed separately by the local utility.

The smaller states and territories each run their own framework. Western Australia (WA) uses development contribution plans under State Planning Policy 3.6. South Australia (SA) levies open-space and general contributions on subdivision. The Australian Capital Territory (ACT) is the standout: because land is held on Crown leases, varying a lease to add dwellings triggers a lease variation charge (LVC), set at $46,000 per dwelling from 1 July 2025 for the relevant lease variations. Tasmania (TAS) and the Northern Territory (NT) tend to apply lighter, council-set headworks and contributions, but always confirm the local position rather than assuming it is small.

In New Zealand (NZ), councils charge development contributions under the Local Government Act 2002, set in each council’s development contributions policy and covering water, wastewater, stormwater, transport, reserves and community infrastructure. They are charged per additional unit of demand and, as Hamilton City Council’s guidance shows, Goods and Services Tax (GST) is added on top. Because the rates differ by council and are reset periodically, price them from the specific council’s current policy.

Why are land holding costs the cost of time, and what gets missed?

Holding costs are the costs of simply owning the site while nothing is being built or sold: land tax, council rates, insurance, security, and the interest on any land loan. They scale with time, so every month of delay in planning or pre-sales adds to them, and they are one of the most under-budgeted lines in early feasibilities.

Land tax is the big one, and it varies sharply by state. In New South Wales (NSW), land tax applies above a general threshold of $1,075,000 (frozen from 2025), at $100 plus 1.6 per cent of the land value above the threshold up to a premium threshold, per Revenue NSW. In Victoria, the general threshold is just $50,000, so almost any development site is caught, per the State Revenue Office of Victoria. In Queensland, the threshold is $600,000 for individuals and $350,000 for companies and trustees, per the Queensland Revenue Office.

The trap that catches developers is the assessment date. Land tax is assessed on ownership at a single moment each year: midnight on 31 December in New South Wales (NSW) and Victoria, and midnight on 30 June in Queensland. Hold a site across two of those dates and you wear two full years of land tax, even if you owned the land for only 13 months. There is generally no broad “I am developing it” exemption for vacant land held by a company or trust, so model the holding period honestly and count every assessment date it crosses. New Zealand has no land tax, which removes this line from a New Zealand (NZ) holding budget, though council rates still apply.

Do sales and marketing costs belong in Total Development Cost (TDC)?

Yes, the cost of selling the product is part of the cost of the project, even though it sits at the back end. The main items are agent commission, the marketing campaign, a display suite or signage on larger schemes, and the legal cost of preparing contracts and completing settlements.

Agent commission on project sales may typically run around 1.5 to 3 per cent of the sale price plus Goods and Services Tax (GST), with marketing a separate budget on top. A subtlety worth getting right: some of these costs are paid up front from equity (a marketing campaign, a display suite), while agent commission is usually only paid out of the sale proceeds at settlement. That timing difference is why some models keep settlement sales costs separate and net them off the revenue line, while the up-front marketing and selling costs sit inside Total Development Cost (TDC). The total spend is the same either way; where it lands just affects how cleanly your revenue and cost figures read.

What finance costs go into Total Development Cost (TDC) beyond interest?

Interest is the largest finance cost, but it is not the only one. Lenders also charge an establishment or application fee (commonly around 1 to 2 per cent of the facility), an ongoing line fee on the facility limit, progressive drawdown fees, valuation and Quantity Surveyor (QS) progress-inspection fees, and sometimes an exit or agency fee. On a stretched senior facility, or where mezzanine finance tops up the capital stack at a higher rate, these add up quickly.

Interest itself depends on how the facility is structured. If interest is capitalised, it is reserved inside the facility and accrues against the loan rather than being paid monthly, which means you borrow to pay your interest and the cost compounds. If it is serviced, you pay it monthly from equity. Because a construction facility is drawn progressively rather than all at once, interest is usually estimated on an average drawn balance rather than the full limit. A common modelling convention assumes roughly 55 per cent of the facility is outstanding on average across the term, and uses that to estimate interest, though your lender’s actual drawdown profile is what matters on the day.

One subtlety in that interest reserve catches developers out. When a lender sizes a facility at, say, 80 per cent of Total Development Cost (TDC), the facility’s own interest reserve and fees are usually held inside that limit rather than added on top. So the cash that actually reaches your project costs is less than 80 per cent of Total Development Cost (TDC), and equity has to make up the difference. The headline Loan to Cost (LTC) ratio describes the facility limit, not the share of your costs the loan funds, so your effective leverage on costs sits below the figure you were quoted. Size your equity for that gap rather than assuming an 80 per cent facility leaves you finding only 20 per cent.

Whether finance sits inside your headline Total Development Cost (TDC) or in a separate finance layer is the development-cost-versus-project-cost question from earlier. Either way, count all of it. A development finance broker can help you see the full fee schedule, which is often where the surprises hide.

How does Goods and Services Tax (GST) flow through your Total Development Cost (TDC)?

Model your costs excluding Goods and Services Tax (GST), because a registered developer generally reclaims the Goods and Services Tax (GST) paid on development costs as an input tax credit. Treat it as a cashflow and timing item, not a permanent cost. You pay Goods and Services Tax (GST) on most cost lines as you go, claim it back through your Business Activity Statement, and the net effect on profit is usually neutral. The cashflow effect is real, though: you fund the Goods and Services Tax (GST) on costs for the weeks or months until the credit comes back, which is a working-capital cost even when it does not reduce your profit.

On the revenue side, Goods and Services Tax (GST) is a genuine cost, and this is where the margin scheme earns its keep. Under the standard rules you remit one eleventh of the full sale price. Under the margin scheme, where you are eligible and have a written agreement with the buyer in place on or before settlement, you remit one eleventh of the margin instead (broadly, sale price less the original land cost). On a project with a $1.5 million margin, that can be the difference between roughly $136,000 and $272,000 of Goods and Services Tax (GST). The Australian Taxation Office (ATO) sets out the eligibility rules and the separate Goods and Services Tax (GST) at settlement withholding obligation, both of which belong in your numbers. A feasibility model should handle the margin scheme properly rather than applying a flat Goods and Services Tax (GST) assumption, because the difference can move the bottom line materially on a residential project.

New Zealand (NZ) runs Goods and Services Tax (GST) at 15 per cent rather than 10 per cent, and treats development land differently again: sales of land between two registered parties are generally zero-rated (compulsory zero-rating), and there is no margin scheme equivalent. So a New Zealand (NZ) feasibility handles Goods and Services Tax (GST) on a different basis from an Australian one, and you should confirm the treatment with the Inland Revenue Department (IRD) or your adviser rather than porting Australian assumptions across the Tasman.

What do developers most often leave out of Total Development Cost (TDC)?

The costs that get missed are rarely the big, obvious ones. Nobody forgets the land or the build. The omissions that quietly erode margin are the time-based and back-end lines that do not arrive as a single quote.

The usual suspects are holding costs that run longer than planned, especially land tax counted across multiple assessment dates rather than a single year. Cost escalation on construction that starts twelve or eighteen months after the estimate. A contingency set too thin to absorb a real variation. Finance fees beyond the headline interest rate, the line fees, drawdown fees and exit fees. Infrastructure contributions priced from a stale assumption rather than the current schedule. Professional fee creep as the consultant team grows through the approval process. Authority and utility headworks billed separately by the water or power provider. And statutory insurances such as home warranty cover, which in New South Wales (NSW) is the Home Building Compensation Fund (HBCF) premium, required on most residential building work over the threshold.

Each of these is small next to the land or the build. Together they can be the whole of a thin margin. The discipline is to budget the lines you cannot yet quote (escalation, contingency, finance fees, holding costs) as deliberately as the lines you can, rather than leaving them at zero until reality fills them in.

How does Total Development Cost (TDC) drive your feasibility?

Total Development Cost (TDC) is the input three of your most important metrics are built on, so an error in it does not stay contained, it flows straight through to profit, gearing and land price.

Your development margin on cost is profit divided by Total Development Cost (TDC), so understate the cost base and you overstate the margin, which is exactly the error that makes a marginal deal look safe. Your lender sizes debt on a Loan to Cost (LTC) basis, debt divided by Total Development Cost (TDC), so the same number sets how much you can borrow and how much equity you must find. And your Residual Land Value (RLV), the most you can pay for the site, is the Gross Realisation Value (GRV) less the rest of the Total Development Cost (TDC) less your target profit, so the cost build-up is what tells you whether the land price on the table is one you can afford.

This is the work a feasibility model does. In Feasly you build the cost stack line by line to a Total Development Cost (TDC), and the model returns development margin on cost and on revenue, the Loan to Cost (LTC) and Loan to Value Ratio (LVR) against your chosen basis, and back-solves Residual Land Value (RLV). Its cost assist feature can insert the typical cost lines for your development type and state as a starting checklist, so fewer lines start at zero. Because every cost feeds the same total, you can flex any input under sensitivity analysis and watch the margin move, which is the fastest way to see which costs your deal is actually exposed to. Once the build-up is right, phasing it into a cashflow model shows when the money is needed, which is what drives the interest cost and your peak funding requirement.

What does a Total Development Cost (TDC) build-up look like?

The table below is an illustrative build-up for a small four-townhouse project, to show how the stack assembles and where the development-cost and project-cost lines divide. The figures are round and indicative only, not a benchmark; your project’s numbers will differ.

Two things stand out, and they are typical. The land and construction together are about $4.2 million of a $5.3 million total, so the other 20-odd per cent sits in the lines developers most often shortcut. And the $320,000 of finance is a fifth of a million dollars that depends entirely on funding structure and program length, which is the case for keeping it visible rather than buried. Run the same scheme with a longer approval and a higher Loan to Value Ratio (LVR) and the finance line, and the holding line above it, both grow.

Frequently asked questions

Does total development cost include Goods and Services Tax (GST)?

Generally you model Total Development Cost (TDC) excluding Goods and Services Tax (GST), because a registered developer reclaims the Goods and Services Tax (GST) on costs as an input tax credit, so it is not a permanent cost. It still matters for cashflow (you fund it until the credit returns) and on the revenue side, where the margin scheme can reduce the Goods and Services Tax (GST) you remit on sales.

Does total development cost include finance costs?

It depends who is asking. A lender sizing a facility on a Loan to Cost (LTC) basis usually includes finance in the total. A quick development margin on the build often excludes it. The cleanest practice is to report development costs (land through to sales) separately from finance, then add them to a total project cost, so the comparison stays honest.

Is land cost part of total development cost?

Yes. The purchase price, plus transfer (stamp) duty and acquisition costs, is part of your feasibility Total Development Cost (TDC), and usually the largest single line. Note that it is deliberately excluded from a planning authority’s “estimated development cost”, which is a narrower figure used only to set application fees and the approval pathway.

What contingency should be in a Total Development Cost (TDC)?

A construction contingency of around 5 to 10 per cent of construction cost is a common allowance, higher early in design and on complex or refurbishment work, tightening as the scope and contract firm up. It is calculated on construction cost, so be clear whether your percentage is applied to the figure including or excluding Goods and Services Tax (GST).

This guide is general information for property developers and others in the industry, not financial, tax, legal or planning advice. Figures, thresholds and rates change and vary by project and jurisdiction. Confirm the current position with the relevant primary source, such as the Australian Taxation Office (ATO), your state revenue office or planning authority, and seek professional advice before relying on any number in your own feasibility.