Developer cost price vs retail investor
| Developer cost price | Retail investor | |
|---|---|---|
| Market value on completion | ||
| Less developer profit + selling costs | — | |
| Purchase price | ||
| Stamp duty | — | |
| Other purchase costs | ||
| Total purchase cost | ||
| Instant gain / (loss) vs value | ||
| Gross rental yield | ||
| Total difference in your favour | ||
Tax & exit (2026-27 Budget)
New builds keep full negative gearing and the CGT choice under the 2026-27 Budget. Established homes keep neither. Buying at developer cost price is always a new build.
Developer cost price new build
Retail investor new build
Your total position after the hold
The exit line above is only part of the story. Total return counts the day-one equity, the after-tax cash flow across the hold, and the equity realised at sale after CGT and repaying the loan, all measured against the cash you put in.
Developer cost price
Retail investor
The picture
Where the discount comes from
Total cost vs value
Value & equity over the hold
Net proceeds after CGT at exit
Total profit on cash over the hold
Recycle it: one deal becomes a portfolio
The equity you manufactured doesn’t have to sit there. Once the build completes and the property has found its retail value, you refinance, pull your deposit (and a slice of the equity) back out, and put it to work as the deposit on the next one — bought again at cost price. Keep the profit working as your deposit and the portfolio compounds, without tipping in fresh savings each cycle. Eventually a single cycle frees enough to start two at a time.
What one property frees up
After years of recycling
| Cycle | New builds | Portfolio | Portfolio value | Your equity | Cash recycled |
|---|