My search of the forums didn't find an answer to this - apologies if it has been already addressed. Assume the intention is to build and hold new dwelling[ s ] on an existing IP to be demolished. Since the intention is to build and hold, we aren't concerned with the asset becoming trading stock, GST or development profits being treated as ordinary income. However, am I correct in my understanding of the following? SCENARIO 1 - Build and Hold Proceeds Feasibility, DA, BA, Construction costs add to cost base of the overall development Interest on funds used for the above expenses deductible against ordinary income of the development entity (if Steele's conditions met). The development entity is the owner of the existing IP. Losses if any, carried forward. SCENARIO 2 - Project Delayed / Restarts What happens if the project initially doens't proceed, but say, after a period of time, an alternative DA is submitted (maybe town planning changes lead to a more favorable development). Original Feasibility and DA add to cost base of the overall development? Interest on Original Feasibility and DA add to cost base of the overall development? Steele's timing requirements for expenditure and income too long? New DA, BA, Construction add to cost base of the overall development? Interest on New DA/BA/Construction deductible against ordinary income (if Steele's conditions met) SCENARIO 3 - Project doesn't proceed What happens if the project stops after Feasibility or DA . There are probably subsets of this scenario (a) IP sold with valid DA and/or BA; (b) sold with no DA, or expired DA/BA (c) not sold for a long time (>5 yrs) - maybe this is same as (b) Do these Feasibility / DA costs go in the 'black hole' and never become available to reduce taxable income or capital gains; or, can they be added to the cost base of the original IP; or, can these costs be deducted against the income of the original IP. In which case, why would you ever want these costs added to the cost base of the new development. (say in Scenario 1 - I suspect this approach isn't allowed) Of course, if the intention is to build and sell, then this would be completely different, with some costs presumably being expensed, and others capitalised .... but's that a different issue and not part of this question/thread.