Costs, Price Drivers and 2026 Rules
Renovation rules by state: licences, written contracts, deposits and cooling-off in 2026
State-by-state thresholds for builder licences, written contracts, deposit caps, cooling-off periods and home warranty insurance for Australian renovations, as of October 2026.
Every Australian state and territory sets its own rules for home building work, and the dollar thresholds differ. In NSW, a written contract is required for residential building work over $5,000 including GST, deposits are capped at 10% and home building compensation cover is needed over $20,000. In Victoria, a major domestic building contract and a registered builder are needed for most work over $10,000, and the deposit cap has been 10% under $20,000 and 5% at $20,000 or more, with reforms commencing by 1 December 2026. In Queensland, building work over $3,300 generally needs a QBCC licence and home warranty cover, with deposits capped at 10% below $20,000 and 5% at $20,000 or more. This guide sets out those rules as of October 2026 and tells you where to confirm them.
This is part of the renovation cost overview. The figures matter for your budget because they decide how much you pay up front and what protection you get if a builder fails.
Summary table: NSW, Victoria and Queensland
| Rule | NSW | Victoria | Queensland |
|---|---|---|---|
| Main law | Home Building Act 1989 | Domestic Building Contracts Act 1995 and Building Act 1993 | Queensland Building and Construction Commission Act 1991 |
| Regulator | Building Commission NSW | Building and Plumbing Commission | Queensland Building and Construction Commission (QBCC) |
| Written contract | Over $5,000 incl. GST (small job contract $5,000 to $20,000; large job contract over $20,000) | Major domestic building contract for most work over $10,000 | Regulated domestic building contracts over $3,300 must meet set requirements |
| Licence or registration | Licensed contractor for residential building work over the threshold; specialist trades always licensed | Registered builder to enter a major domestic building contract | QBCC licence for building work over $3,300 (lower for hydraulic design; some trades at any value) |
| Deposit cap | 10% | 10% under $20,000, 5% at $20,000 or more (DBCA s. 11), until reform regulations take over | 10% under $20,000; 5% at $20,000 or more; 20% if off-site work is over half the price |
| Cooling-off | 5 clear business days for contracts over $20,000 | 5 clear business days after receiving the signed contract (check exclusions) | 5 business days after receiving the contract documents |
| Home warranty | Home Building Compensation Fund cover over $20,000 | Domestic building insurance over its threshold (stated by the regulator as $16,000) | Queensland Home Warranty Scheme for residential work over $3,300 |
| Tribunal | NCAT | VCAT (usually after dispute resolution through the Commission) | QCAT (usually after QBCC early dispute resolution) |
NSW in more detail
Under the Home Building Act 1989 and the NSW Government's guidance (last updated 29 April 2026):
- A written contract is required where the contract price is over $5,000 including GST, or where the price is unknown but the reasonable market cost is over $5,000.
- Work between $5,000 and $20,000 needs a small job contract; over $20,000 needs a large job contract with more detail, including a progress payment schedule.
- The maximum deposit is 10% of the contract price.
- Large job contracts must state a cooling-off period of five clear business days.
- For contracts over $20,000, the builder must give you a Home Building Compensation (HBC) certificate before taking a deposit or starting work.
- Statutory warranties run for 6 years for major defects and 2 years for other defects for contracts signed from 1 February 2012.
Specialist work such as plumbing, gasfitting and electrical wiring needs a licence regardless of value. Disputes go first to Building Commission NSW, which now handles home building complaints, and then to NCAT. See building disputes.
Victoria in more detail
Victoria's regulator is the Building and Plumbing Commission, which brought together the Victorian Building Authority, Domestic Building Dispute Resolution Victoria and the domestic building insurance function previously run by the Victorian Managed Insurance Authority. Older documents may still say VBA, DBDRV or VMIA.
- A major domestic building contract is required for most domestic building work over $10,000, even if the owner is an owner-builder, and the builder must be registered to enter it.
- Deposit: under section 11 of the Domestic Building Contracts Act 1995, a builder must not demand more than 10% if the contract price is under $20,000, or 5% if it is $20,000 or more.
- Cooling-off: you can generally withdraw within five clear business days of receiving a signed copy of the contract, with some exceptions (for example if you received independent legal advice before signing).
- Domestic building insurance is required above the regulator's threshold.
2025 reforms. The Domestic Building Contracts Amendment Act 2025 passed in September 2025. Its main provisions start on a day proclaimed, and any not yet proclaimed start on 1 December 2026. The reforms extend basic contract requirements to all domestic building contracts, move deposit limits and progress payment stages into regulations, allow capped cost escalation clauses for contracts of $1 million or more, and strengthen owners' rights to end major contracts. If you sign in late 2026, ask which version of the law applies to your contract and check the Building and Plumbing Commission and Consumer Affairs Victoria.
Queensland in more detail
Under the QBCC Act 1991 and Schedule 1B:
- A QBCC licence is needed for building work valued over $3,300 (including labour, materials and GST), and for some work such as plumbing, drainage, gasfitting and chemical termite management at any value.
- Home warranty cover under the Queensland Home Warranty Scheme applies to most residential construction work over $3,300; the premium is built into the contract price.
- Deposit: 10% for a level 1 regulated contract (above $3,300 but under the level 2 amount of $20,000) and 5% for a level 2 contract ($20,000 or more), or 20% where off-site work is more than half the price.
- Cooling-off: five business days after you receive a copy of the signed contract and required documents.
Other states and territories
The rules elsewhere follow the same pattern with different numbers. Check before relying on any figure:
| Jurisdiction | Where to check |
|---|---|
| Western Australia | Building and Energy, WA Government: builder registration, home building contracts and home indemnity insurance thresholds |
| South Australia | Consumer and Business Services: building work contractors licensing, contracts and building indemnity insurance |
| Tasmania | Consumer, Building and Occupational Services: residential building work contracts and licensing |
| ACT | Access Canberra: builder licensing and residential building warranties |
| Northern Territory | NT Government building practitioner registration and the Building Practitioners Board |
Australian Consumer Law applies everywhere
On top of state rules, the Australian Consumer Law gives you statutory guarantees that services are provided with due care and skill, are fit for any purpose you made known, and are supplied within a reasonable time. See consumer guarantees and statutory warranties.
FAQ
Do these rules apply to tradespeople, not just builders?
Yes, if the work is building work above the threshold. A tiler or carpenter contracting directly with you for a $25,000 job in NSW needs a licence, a written contract and an HBC certificate.
Does the contract price include GST for thresholds?
In NSW and Queensland the thresholds are stated including GST. Check the Victorian legislation for how the contract price is measured.
Can I waive the cooling-off period?
In some states you can if you have received independent legal advice before signing, and the rules are strict. Ask a lawyer before you do.
What if the builder asks for more than the cap?
Do not pay it. Asking for an excessive deposit can be an offence. Report it to the regulator.
Sources
- Building Commission NSW, via NSW Government — contracts, deposits and HBC insurance in NSW
- NSW Legislation — Home Building Act 1989
- Victorian Legislation — Domestic Building Contracts Act 1995 and Amendment Act 2025 (No. 36 of 2025)
- Consumer Affairs Victoria — domestic building contract reforms
- Building and Plumbing Commission (Victoria) — registration and domestic building insurance
- Queensland Legislation — QBCC Act 1991, Schedule 1B
- Queensland Building and Construction Commission — licences and home warranty
