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Residual land value calculator
Calculate the maximum amount you can pay for a site and still hit your target profit on cost. The site-screening number used by acquisitions teams every day.
Formula
RLV = Net realisation − (TDC excl. land) − Target profit
Target profit is calculated on (TDC excl. land + RLV), solve iteratively.
Inputs
Net realisation
Expected sales revenue after selling costs and GST.
Non-land TDC
All costs except land, construction, fees, contributions, finance, contingency, plus an allowance for stamp duty if including it inside RLV.
Target profit on cost
The hurdle you're solving against, typically 18–22%.
Output
RLV ($)
The maximum land price (often inclusive of stamp duty and acquisition costs) that lets the project clear your hurdle.
Worked example
Net realisation $26.2M, non-land TDC $16.9M, target profit on cost 20%.
Solve: ($26.2M − $16.9M − RLV) / ($16.9M + RLV) = 20% → RLV ≈ $5.45M.
If the asking price is $7.2M, the deal doesn't clear at a 20% profit on cost.
Questions
Frequently asked
Is RLV the same as the offer price?
RLV is the ceiling, not the offer. Most teams offer 5–15% below RLV to leave room for the unexpected.
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