The 10-step framework

1. STEP 1

   Define your development strategy

   Common small-scale strategies in Adelaide: buy an older home and hold as an investment, knock down and rebuild a single home to sell, subdivide a block and sell one lot vacant, subdivide and build two dwellings (duplex, dual occ or torrens-title pair), or split a corner block into a battle-axe and street lot. Each strategy has different tax, finance and planning consequences. Choose deliberately.

2. STEP 2

   Run a real feasibility study

   A feasibility study models: purchase price, stamp duty, holding costs during design and build, construction cost, sale price of finished product (or rental yield if holding), disposal costs (agent, legal, marketing), GST margin scheme where applicable, and net profit or return. Small-scale developers often skip this step and rely on gut feel. Bad idea. A quantity surveyor or development advisor can produce a defensible feasibility for a modest fee.

3. STEP 3

   Confirm the site can actually be developed as planned

   Zoning, overlays, minimum site area for subdivision, minimum frontage, setback and site coverage rules, tree protection, easements. All of this must be verified with a town planner before purchase, not after. Many enthusiastic first-time developers commit to a block that cannot legally be split or built out the way they assumed.

4. STEP 4

   Choose the right ownership structure

   Individual name, joint tenants, tenants in common, self-managed super fund, discretionary trust, unit trust, partnership, company. Each structure has different tax, asset protection and finance consequences. Talk to an accountant before you sign the land contract; changing structure after purchase often triggers CGT and stamp duty.

5. STEP 5

   Understand the tax treatment

   Development for profit is typically treated as income (revenue account), not capital gains. That changes the tax outcome materially. GST applies to new residential premises sold within 5 years of completion. The margin scheme can reduce GST payable but requires eligibility. Get advice specific to your circumstances from an accountant with property experience.

6. STEP 6

   Budget for holding costs during design and build

   A subdivide-and-build project can run 18 to 30 months from purchase to sale. During that time you pay: land tax, council rates, insurance, interest on finance, and any strata or corporation fees. On a $600,000 site with 8 percent finance, holding costs alone can approach $100,000. Budget them explicitly; they are not a rounding error.

7. STEP 7

   Get commercial-terms finance early

   Development finance is not standard home loan finance. Lenders assess feasibility, presales evidence, developer experience, LVR against completed value and often demand recourse guarantees. First-time developers may find only a handful of lenders willing to lend on a two-dwelling project. Engage a broker with commercial development experience early.

8. STEP 8

   Choose the right builder for the strategy

   For subdivide-and-sell projects, a mid-volume builder with a proven duplex portfolio is often the right choice for speed and cost efficiency. For premium infill product targeting owner-occupier buyers, a semi-custom or custom builder produces a stronger sale outcome. The wrong builder for the strategy can compress margins to nothing.

9. STEP 9

   Plan the disposal path

   Are you selling both dwellings, selling one and living in the other, or holding both as long-term rentals? Each path has different tax, marketing and finance implications. Selling into a soft market can extend holding costs and erode margin. Have a plan B (rent the finished product) if the sale plan A does not clear.

10. STEP 10

    Verify insurance and contract structure for developer role

    When you engage a builder as owner-developer, the builder holds Home Indemnity Insurance for you as the owner. If you build under your own builder licence or as an owner-builder, different rules apply and buyer protection changes. This affects the resale story. Talk to a building lawyer before signing.

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