Worked Estimates and Checklists
Renovation deposits and progress payments in Australia: legal caps and a safe schedule
How much deposit an Australian builder can ask for in NSW, Victoria and Queensland, how progress payments should work and how to build a payment schedule that protects you.
A builder cannot ask for an unlimited deposit. In NSW the cap is 10% of the contract price; in Queensland it is 10% for contracts under $20,000 and 5% for $20,000 or more (20% where more than half the work is done off site); and in Victoria it has been 10% under $20,000 and 5% at $20,000 or more under section 11 of the Domestic Building Contracts Act 1995, with reforms that move deposit limits into regulations commencing by 1 December 2026. After the deposit, progress payments should match work actually completed, never run ahead of it. A sound schedule keeps the amount you have paid at or below the value of the work on site at every stage.
This guide is part of worked estimates and checklists. State-by-state context is in renovation rules by state.
Deposit caps at a glance
| State | Contract value | Maximum deposit |
|---|---|---|
| NSW | Over $5,000 (contract required) | 10% |
| Victoria | Under $20,000 | 10% (DBCA s. 11, until reform regulations apply) |
| Victoria | $20,000 or more | 5% (DBCA s. 11, until reform regulations apply) |
| Queensland | Over $3,300 and under $20,000 | 10% |
| Queensland | $20,000 or more | 5% |
| Queensland | Off-site work more than 50% of the price | 20% |
Other states and territories have their own limits; check the regulator listed in renovation rules by state.
Worked example: deposit (illustrative)
- NSW, $60,000 bathroom and laundry: maximum deposit 10% = $6,000.
- Queensland, the same $60,000 job: level 2 contract, maximum 5% = $3,000.
- Victoria, the same job signed under section 11: 5% = $3,000.
- Queensland, $15,000 deck: level 1 contract, 10% = $1,500.
A request for a separate "materials deposit", "booking fee" or "design fee" on top of the deposit for the same contract should be treated with suspicion. In many states, any payment before work starts counts towards the cap.
Insurance before money
Where home warranty or domestic building insurance is required, the builder should give you the certificate before you pay a deposit. In NSW, for contracts over $20,000, the Home Building Compensation certificate must be provided before the builder asks for or receives a deposit or starts work. In Queensland the premium is collected with the deposit and paid to the QBCC. See home warranty insurance by state.
How progress payments should work
Progress payments are paid as the job reaches defined stages. The principle in every state is the same: a claim should relate to work done and be proportionate to its value. In Queensland, the QBCC Act states this directly for regulated contracts. Victoria has set stage percentages for new homes and its reforms extend payment rules through regulations. In NSW, large job contracts over $20,000 must include a progress payment schedule, and payments must match the work carried out.
An illustrative schedule for a $120,000 extension
| Stage | Share | Amount | Paid to date | Comment |
|---|---|---|---|---|
| Deposit | 5% | $6,000 | $6,000 | Within the Queensland and Victorian 5% caps; NSW allows up to 10% |
| Base (slab or footings) | 15% | $18,000 | $24,000 | After inspection |
| Frame | 20% | $24,000 | $48,000 | After frame inspection |
| Lock-up (roof, windows, external doors) | 25% | $30,000 | $78,000 | |
| Fixing (linings, joinery, wet areas) | 20% | $24,000 | $102,000 | |
| Practical completion | 15% | $18,000 | $120,000 | After your final inspection and defects list |
These stage shares are illustrative. Your contract and, where applicable, state rules decide them. Check that each claim is for a stage that has actually been reached, and inspect before paying.
Protect yourself at each claim
- Inspect the stage, ideally with an independent building inspector at key stages for larger jobs.
- Compare the claim with the contract schedule and any approved variations.
- Ask for invoices for any variation included in the claim.
- Pay on time once the stage is genuinely complete. Late payment can give the builder rights under the contract.
- Hold the final payment until practical completion is reached and the defects you listed are recorded. Do not withhold more than the contract allows without legal advice.
Finance and payments
If a lender is funding the work, it will usually release money in stages that match the contract, often after its own valuer inspects. Make sure the bank's draw-down schedule lines up with the builder's schedule, or you may have a shortfall. Keep your contingency (see contingency and variations) in cash where you can reach it quickly.
Mistakes to avoid
- Paying more than the cap because the builder says it is "standard".
- Paying for materials not yet delivered to site.
- Paying the final instalment before practical completion is agreed.
- Paying cash without a receipt or to an account in a different name from the contracting entity.
FAQ
Is a deposit above the cap illegal?
Demanding or receiving a deposit above the cap is prohibited in NSW, Victoria and Queensland and can attract penalties. Report it to the regulator.
Can a builder ask for a progress payment before starting?
Not as a disguised deposit. Payments should relate to work done after the deposit.
What if I dispute a progress claim?
Respond in writing within the contract's time limit, explain which work is incomplete and pay any undisputed part. Then follow building disputes.
Do these caps apply to small jobs?
They apply to contracts above each state's threshold. Below it, agree a modest deposit and pay on completion.
Sources
- Building Commission NSW, via NSW Government — deposits and progress payments in NSW
- Victorian Legislation — Domestic Building Contracts Act 1995, s. 11, and the 2025 Amendment Act
- Consumer Affairs Victoria — reform updates
- Queensland Legislation — QBCC Act 1991, Schedule 1B
- Queensland Building and Construction Commission — contracts and payments
