How do I finance a property development in Queenstown?

Map the funding from settlement to completion

An initial land or acquisition facility may fund the purchase. A construction facility can then fund approved work through progressive drawdowns after agreed borrower equity is contributed and progress is checked. Some lenders structure both stages in one facility; others require a new construction approval. A land loan is not a promise to fund the build.

A feasibility should show purchase price, design and consent costs, contract price, professional fees, contingency, interest and fees while building, GST cash flow and the intended repayment or refinance. Depending on project size, a lender may request a valuation, quantity surveyor review, consent, builder details, presales and evidence of an exit.

Structure the loan around the exit

If you plan to sell completed dwellings, explain the sales timetable and how proceeds repay the facility. If you intend to keep a completed home or short-stay property, check whether it can move to longer-term lending on the expected income and property use. A short development loan is not automatically a permanent mortgage.

Ask whether interest is paid monthly or capitalised within an agreed limit. Check when each progress payment can be drawn and what evidence is needed. The draw schedule affects both contractor payments and interest cost.

Compare the full fee schedule

Typical cost categories to request in writing are interest, establishment or application fees, line or commitment fees, lender and borrower legal fees, valuation, quantity surveyor and inspection costs, drawdown fees, and any extension or early repayment fees. Adviser or broker fees, if any, should also be disclosed.

An establishment fee may be based on the approved limit while interest is charged on drawn funds; a line fee may use the total limit or an undrawn amount. Ask for the cost using your expected draw dates and a delay scenario. There is no single reliable percentage that describes all bank and specialist development facilities.

Align tax and finance assumptions

If the completed property may become an Airbnb or be sold, ask your accountant and lender to review the plan before the purchase agreement is unconditional. GST treatment depends on the ownership entity, intended and actual use, purchase transaction and eventual sale. An unconfirmed input claim is not cash available for settlement.