Finance Solutions
Construction & Development Finance
Build and develop with the tax and the funding planned together
A construction or development project is where tax and finance decisions collide. GST, structure, holding costs and how your profit will be taxed all affect the feasibility, and the feasibility is what a lender funds.
TaxProof works through the tax side from the start. Through our strategic partnership with Rediscover Capital Finance, you can also access brokers experienced in residential and commercial construction and development lending. You go into the project knowing both the numbers and the funding path.
Tax questions to settle before you build
Investor, developer or home builder?
Whether your project is treated as a capital investment or a profit-making venture changes how the gain is taxed. It can decide whether the CGT discount is available at all.
GST on new residential property
Selling new residential premises is generally subject to GST. The margin scheme may reduce the GST payable in some cases. Purchasers of new residential premises and potential residential land generally must withhold part of the price and pay it directly to the ATO at settlement, which affects your cash flow.
GST registration
Development activity can require you to register for GST, even if it's your first project.
Holding costs on vacant land
For individuals and many trusts and partnerships, interest, rates and other holding costs on vacant land generally aren't deductible until a new home can lawfully be occupied and is rented or available for rent. That changes the real cost of a slow project.
Structure
Building in your own name, a company, a trust or a joint venture has different tax, asset-protection and lending consequences.
Capital works deductions
Investors who build to rent can generally claim residential construction costs at 2.5% a year over 40 years. We'll make sure the right records exist from day one.
What a construction lender will want
Lenders typically assess the build contract, plans and approvals, a feasibility with realistic costs and sale values, and evidence of your income and equity. We prepare the tax and financial side: a feasibility that includes GST correctly, lodged returns and clear income evidence. Your broker at Rediscover Capital Finance handles the lender side and progress-draw structure.
How it works
Project tax review. We review your plans, intended use, entity and GST position.
Feasibility check. We test the tax assumptions in your numbers.
Introduction. We connect you with Rediscover Capital Finance to assess construction or development funding.
Through the build. We keep GST, BAS and cost records in order so draws, settlement and your final return run smoothly.
Common questions
Do I need to register for GST for a one-off development?
Possibly. It depends on the size and nature of the project. Ask us before you sign contracts, not after.
Does TaxProof arrange construction loans?
No. Lending is handled by our strategic partner, Rediscover Capital Finance. We advise on the tax and prepare the financial information that supports your application.
Planning a build or development?
Get the tax right before the first slab is poured, then talk to our lending partner, Rediscover Capital Finance, about funding.
Lending services are provided by Rediscover Capital Finance (Australian Credit Licence 389328). TaxProof does not provide credit assistance or lending advice; we refer clients to our lending partner with their consent. Information on this page is general in nature and doesn't take your personal circumstances into account.