Net Development Value (NDV) meaning

Net Development Value (NDV) is the value of a completed commercial development after deducting the costs of acquiring the site. In practice it is calculated as gross development value (GDV) less acquisition costs. Acquisition costs usually cover the land purchase price and related transaction expenses, for example SDLT (England and Northern Ireland), LTT (Wales), LBTT (Scotland), Irish stamp duty, VAT where irrecoverable, and legal/agency fees. NDV is not defined by legislation or case law; it is a descriptive valuation term typically defined in contracts and appraisals (including development agreements, promotion/option agreements, overage/profit‑share provisions and loan covenants). It is often used to test viability and to calculate price adjustments, profit shares and security covenants on commercial schemes. Parties should state the GDV basis (for example RICS Red Book market value), the measurement date (practical completion, letting or sale) and precisely which items form acquisition costs. Unless expressly included, NDV does not deduct construction, financing, marketing or planning‑obligation costs. Usage is broadly consistent across England & Wales, Scotland, Northern Ireland and Ireland; the main variation is the applicable transaction taxes.