The Tax Structures That Save Developers Hundreds of Thousands

For property developers, entity structure isn’t paperwork—it’s a financial strategy. The difference between a clean structure and a sloppy one can mean hundreds of thousands in retained profit.

Mid-market developers often focus on feasibility and funding, but the tax mechanics inside the structure itself quietly determine how much money stays in the project. Here are the structures and mechanisms that matter most.

Use the right entity for the right project

Companies, unit trusts, and special purpose vehicles each behave differently for tax, liability, and profit distribution. A well-designed structure separates assets from risk, allows clean profit extraction, and protects the developer’s wider portfolio.

Understand the Margin Scheme’s true impact

On qualifying residential developments, the Margin Scheme can dramatically reduce GST payable on sales by taxing only the margin, not the full sale value. This often delivers six-figure savings on multi-lot projects. The key is eligibility and documentation—get it wrong, and the ATO won’t be sympathetic.

Structure GST timing to protect cashflow

GST on progress payments, sales, and acquisitions affects liquidity. Align the entity structure with your cashflow cycle so GST isn’t draining capital at the wrong time. Developers who plan GST timing upfront avoid mid-project cash squeezes.

Use SPVs to ring-fence each development

A dedicated SPV (Special Purpose Vehicle) isolates risk, simplifies financing, and ensures lenders view each project independently. It also makes profit extraction cleaner and avoids contaminating other entities with liabilities or losses.

Optimise profit distribution for tax efficiency

Distributing profits through trusts or corporate beneficiaries can significantly reduce overall tax burden. The goal isn’t loopholes—it’s aligning the profit path with the lowest effective tax rate while staying compliant.

For developers doing $7–50M projects, structure isn’t a checkbox—it’s one of the most powerful financial levers available.