Fixed percentage method

The fixed percentage method

This method only requires you to know the:

  • Contract price,
  • Class of building, and
  • Percentage of construction that has occurred at the contract date.

Different classes of building

The different classes of building are:

  • Single lot freestanding or single dwellings sharing side walls, for example a terraced house or duplex. This also includes dwellings which have abutting garage walls. If there is common property, it can not be single lot freestanding.
  • Multi-lot low rise – up to and including 3 storeys, not including basements. These are usually units or apartments with access to common property.
  • High rise multi-lot, 4 or more storeys, not including basements. These are usually units or apartments with access to common property.

The percentage cost of construction works to the purchaser which will be completed after the contract date is:

  • (Cost of works constructed after contract date)/(Total cost of construction works ) x 100

Construction costs

Construction costs include:

  • Legal costs associated with the permit or bringing the building to completion,
  • Surveyors and consultants fees,
  • Planning permits,
  • Water and sewerage connections,
  • Building permits and other similar fees,
  • Vic Roads approval,
  • Gas and electricity approval,
  • Required road access or utilities works,
  • Site decontamination costs,
  • Cost of demolition and removal work, 
  • Cost of material, labour and finance for constructing the building,
  • The profit accruing to the builder/developer (in relation to the building only), and
  • GST in respect of construction costs after the contract.

For assistance in determining the percentage of construction costs completed as at the contract date in relation to ‘single lot freestanding’, please refer to Revenue Ruling DA.048