When you destroy life-forms, whether plants or animals, for entirely your own needs, then then that is regarded as a sin or bad karma in Hinduism.
Manu Smriti also asks the ruler (or King) to impose fines when some trees are destroyed or even injured, based on their usefulness.
8.285. According to the usefulness of the several (kinds of) trees a fine must be inflicted for injuring them; that is the settled rule.
When we destroy life-forms, for the sake of Deva or Pitru Yajnas, only then there is no bad karma involved in it because scriptures say that those life-forms will reach higher states of existence.
5.40. Herbs, trees, cattle, birds, and (other) animals that have been destroyed for sacrifices, receive (being reborn) higher existences.
But in every other circumstance, when we kill animals or plants for our own needs, outside scripture-approved rites, then some amount of bad karma is always involved in it.
That's why Lord Shiva says the following:
Trinam vApya-vidhAnena chedayenna kadAchana |
VidhinA gvAm dvijam
vApi hatvA pApair na lipyate ||
One must not tear even a piece of grass if that is contrary to
scriptural injunctions; But if a cow or a Dvija is killed, in
accordance with scriptural injunctions, then there is no sin involved.
KulArnava Tantram 2.137
The purport of this verse is, that even a seemingly insignificant act like tearing a grass, is a bad karma, if done outside Deva or Pitru Yajnas.
There is also one verse that provides a slightly different opinion in this matter. It is found among Dharma Sutras Of Vashishta 19.11-12:
11 He should not damage trees that produce flowers and fruits,
12 but may cut them down to facilitate cultivation or for household needs.
And, on the verse 19.12 there is a commentary available and is given below:
or for household needs: Führer’s edition of Va joins this phrase with sutra 13. I follow Laksmidhara, Krtyakalpataru, Vyavaharakanda , 504, and Candesvara,
Vivadaratnakara, 284, in joining the phrase with sutra 12. Their
reading clearly makes better sense. I also adopt their reading
garhastyange (or amse) in place of this edition’s garhastyanangam.
Candesvara explains this phrase as grihastakarma (‘householder’s
activities’) or grihastaopakarana (‘householder’s implements’). The meaning appears to be that trees
may be cut down to provide wood for household needs. Given the first
provision allowing trees to be cut down for cultivation, the meaning
also may be that they can be cut down to build houses.
From this commentary it appears that it is okay to cut trees in order to clear grounds where houses are to be built. But it is apparently contradictory with what other scriptures (generally) have to say on cutting trees.
[The commentary is taken from the book "Dharmasutras -- The Law Codes of Apasthambha, Gautama, Baudhayana and Vashishta (translated by Patrick Olivelle).]