Deciding what to buy

Building a new home in Victoria

Home Warranty, the deposit and progress payment limits, variations, defects and builder insolvency when you build a new home in Victoria, with the reforms due by 1 December 2026.

The rules are changing by 1 December 2026

Victoria passed new domestic building contract laws in 2025. The deposit and payment limits on this page are the current ones; the new limits will be set in regulations, and their exact start date had not been published when Delora checked.

• The Domestic Building Contracts Amendment Act 2025 passed the Victorian Parliament on 11 September 2025. Consumer Affairs Victoria says the new laws will take effect by 1 December 2026 and the current laws remain in force until then. Under them, deposit limits, progress payment stages and progress payment limits will be set in regulations; payments for completed work must be proportionate; cost escalation clauses are allowed for contracts of $1 million or more and can only add up to 5% to the price; and major contracts get a single process for variations, whoever requests them. (Consumer Affairs Victoria, verified 22 Oct 2026)
• The Domestic Building Contracts Amendment Act 2025 received Royal Assent on 16 September 2025. Consultation on the draft regulations that will set the new payment rules ran from 18 August to 16 September 2026; the Victorian Government's building reform page (updated 16 October 2026) gives no commencement date for either. (Department of Transport and Planning (Victoria), verified 22 Oct 2026)

House-and-land package or a separate build

Whether you buy a package or a block first, the house is built under a domestic building contract.

• Consumer Affairs Victoria says house and land packages generally involve at least two contracts, one to buy the land and one to build the house. Building can only start when the plan of subdivision is registered; you can cancel the land contract if the subdivision is not registered within 18 months of signing (or by a date in the contract), and your building obligations should not start until registration. The builder must obtain a soil report and foundation data, and you should not have to pay extra later for work the builder should have foreseen from it. (Consumer Affairs Victoria, verified 22 Oct 2026)

Before you sign the building contract

Three checks come before the deposit: the builder's registration, the cooling-off period and the insurance.

• Victoria's Building and Plumbing Commission (formerly the Victorian Building Authority) maintains a free, publicly accessible register of registered building practitioners and plumbers, searchable to verify a practitioner's registration and licence status and to check for past disciplinary or prosecution action, across seven registration categories each with its own scope of lawful work. (Building and Plumbing Commission (Victorian Building Authority), verified 29 Jul 2026)
• In Victoria you have 5 business days after receiving a signed copy of a major domestic building contract to withdraw; the builder can keep $100 plus out-of-pocket expenses you approved. The cooling-off period does not apply if a lawyer reviewed the contract before you signed. You may also end the contract if the price rises by 15% or more, or it is not finished within 1.5 times the contracted period, because of something the builder could not have foreseen. (Consumer Affairs Victoria, verified 22 Oct 2026)
• For eligible Victorian projects the registered builder must pay the Home Warranty premium before the earlier of 10 business days after the building contract is signed or the work starting; not doing so is an offence. Once the Building and Plumbing Commission accepts the premium it issues a Notice of Cover to the building owner. A homeowner may still be protected even if the builder does not pay the premium. (Building and Plumbing Commission (Victoria), verified 22 Oct 2026)

The deposit and progress payments

The deposit and each progress payment are limited by law, and payments follow completed stages.

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Percentages of the total contract price, paid when each stage is complete. (Consumer Affairs Victoria, verified 22 Oct 2026)

• Under Victoria's domestic building law, the deposit on a building contract is at most 10% for contracts under $20,000 and 5% for contracts of $20,000 or more. Consumer Affairs Victoria says not to pay the deposit until the builder gives you a certificate of currency for your property. (Consumer Affairs Victoria, verified 22 Oct 2026)
• Under Victoria's domestic building law you pay for completed stages, at set percentages of the total price. A contract to build to lock-up: base 20%, frame 25%. A contract to build to fixing: base 12%, frame 18%, lock-up 40%. A contract for all stages: base 10%, frame 15%, lock-up 35%, fixing 25%. The frame stage is complete when the frame is approved by a building surveyor, and lock-up when the external wall cladding and roof covering are fixed. Consumer Affairs Victoria says not to pay in advance. (Consumer Affairs Victoria, verified 22 Oct 2026)

Variations and costs that can grow

After signing, the price can change through variations and through allowances such as prime cost items and provisional sums.

• In Victoria, a variation to a major domestic building contract (over $10,000) must be agreed in writing using a Variation Notice that sets out the details and cost of the change before the work starts. A Variation Notice is not needed if the builder reasonably believes the change will not require a permit change, cause delay or add more than 2% to the original contract price. You should not have to pay for variations to deal with issues the builder should have identified before starting work. Prime cost items (fixtures not specifically identified and priced) and provisional sums (work that cannot be priced exactly at signing) can raise the final cost. (Consumer Affairs Victoria, verified 22 Oct 2026)

Home Warranty, and the older domestic building insurance

Which scheme covers you depends on when the building contract was signed.

• Home Warranty is a mandatory insurance scheme for eligible domestic building work in Victoria. It started on 1 July 2026 and covers eligible domestic building contracts signed on or after that date, for work valued at more than $20,000, including the construction of a new home. Existing Domestic Building Insurance (DBI) cover does not transfer to Home Warranty; it continues under the DBI scheme. (Building and Plumbing Commission (Victoria), verified 22 Oct 2026)
• The Victorian Government says the Home Warranty Scheme, which commenced on 1 July 2026, applies to building contracts over $20,000 and 3 storeys or less, and that cover available includes lost deposits, incomplete building work, and non-compliant or defective building work. Under the previous model, homeowners could only access insurance as a last resort under very limited circumstances. (Victorian Government, verified 22 Oct 2026)
• Home Warranty may apply where eligible domestic building work is incomplete, defective or non-compliant, and is not limited to situations where the builder has died, disappeared or become insolvent. The maximum assistance under Home Warranty is $400,000 in total per home. Domestic Building Insurance (DBI), which may apply to work under contracts signed before 1 July 2026 and was required for work valued over $16,000, has generally provided cover of up to $300,000 for homes up to three storeys where the builder died, disappeared or became insolvent. (Building and Plumbing Commission (Victoria), verified 22 Oct 2026)
• Home Warranty cover lasts up to 6 years after the work is completed for major defects and up to 2 years for other defects or non-compliant work. A claim for incomplete work must be made within 12 months after the relevant contract event, and a claim for defective or non-compliant work within 12 months after the homeowner first becomes aware, or should reasonably have become aware, of the issue. Assistance is up to $400,000 in total per home; incomplete work is capped at 30% of the total contract price, including agreed variations; accommodation, removal and storage costs up to $12,000; securing a building site up to $5,000. (Building and Plumbing Commission (Victoria), verified 22 Oct 2026)
• Home Warranty may help where eligible work is incomplete, defective or non-compliant and the builder is unable or unwilling to complete or fix it, and may help with a lost deposit where building work has not started. In most cases the homeowner must first give the builder a complaint notice and allow time for a response before the Building and Plumbing Commission can assess a claim. It may not cover work outside the contract, plans, specifications or agreed variations; minor cosmetic differences; fair wear and tear; defects caused or worsened by missed maintenance; or work done by an unregistered builder where a registered builder is required. (Building and Plumbing Commission (Victoria), verified 22 Oct 2026)

Defects after you move in

Two protections overlap: the builder's own warranties under the Act, and the insurance cover periods above.

• Under the Domestic Building Contracts Act 1995, a builder warrants that the work will be done in a proper and workmanlike manner, with materials that are good, suitable and new, in accordance with all laws, with reasonable care and skill and by the contracted date, and that a new home will be suitable for occupation when completed. These warranties last for up to 10 years from completion of the work and transfer to a new owner if the property is sold within that time. (Consumer Affairs Victoria, verified 22 Oct 2026)
• Domestic Building Dispute Resolution Victoria (DBDRV) is now part of the Building and Plumbing Commission (BPC). A homeowner with a building dispute should first discuss the issue directly with the builder, then put concerns in writing if that doesn't resolve it, and can lodge a DBDRV/BPC dispute resolution application if there is no reasonable response. (Consumer Affairs Victoria, verified 1 Aug 2026)

If the builder becomes insolvent

Consumer Affairs Victoria's advice is to get legal advice before you act.

• If you think your Victorian builder is insolvent, Consumer Affairs Victoria says to get legal advice and contact the Building Information Line, and to get legal advice before ending the contract, hiring another builder or paying subcontractors. ASIC can confirm whether a company is insolvent, and AFSA whether a sole trader or partnership is. (Consumer Affairs Victoria, verified 22 Oct 2026)

Building in another state

Insurance thresholds, deposit limits and payment rules differ across the border. Compare them on building a new home by state.

Practical checklist

Before you sign a Victorian building contract

• Check the builder's registration on the Building and Plumbing Commission register
• Ask which law the contract is written under if you sign near 1 December 2026
• Do not pay the deposit until you have the builder's insurance document for your home
• Check the deposit and each stage payment against the limits above
• Agree every variation in writing before the work is done
• Keep the contract, plans, permits, invoices and every message with the builder

Questions for a professional

• Does Home Warranty or the older domestic building insurance cover this contract?
• Is the deposit and the payment schedule within the legal limits?
• Which costs are prime cost items or provisional sums, and how much could they move?
• If this is a house-and-land package, what happens to the building contract if the land is not registered on time?

Official resources

• Building and Plumbing Commission: Home Warranty
• Consumer Affairs Victoria: deposits and payments for building work
• Consumer Affairs Victoria: new domestic building contract laws

Sources and methodology

• New domestic building contract laws passed in Victoria | Consumer Affairs Victoria — Consumer Affairs Victoria (retrieved 22 Oct 2026). Licence: CC BY 4.0
• Home Warranty | Building and Plumbing Commission — Building and Plumbing Commission (Victoria) (retrieved 22 Oct 2026). Licence: CC BY 4.0
• Domestic Building Insurance and Home Warranty | Building and Plumbing Commission — Building and Plumbing Commission (Victoria) (retrieved 22 Oct 2026). Licence: CC BY 4.0
• Deposits and payments for building work | Consumer Affairs Victoria — Consumer Affairs Victoria (retrieved 22 Oct 2026). Licence: CC BY 4.0
• Getting out of a building contract - checklist | Consumer Affairs Victoria — Consumer Affairs Victoria (retrieved 22 Oct 2026). Licence: CC BY 4.0
• Implied warranties and domestic building insurance - checklist | Consumer Affairs Victoria — Consumer Affairs Victoria (retrieved 22 Oct 2026). Licence: CC BY 4.0
• Building reform | Planning Victoria — Department of Transport and Planning (Victoria) (retrieved 22 Oct 2026). Licence: CC BY 4.0
• Building a home with a large building company - checklist | Consumer Affairs Victoria — Consumer Affairs Victoria (retrieved 22 Oct 2026). Licence: CC BY 4.0
• Find a practitioner — Building and Plumbing Commission (Victorian Building Authority) (retrieved 29 Jul 2026, last checked 7 Aug 2026). Reuse terms: see the publisher's site
• Home Warranty premium and Notice of Cover | Building and Plumbing Commission — Building and Plumbing Commission (Victoria) (retrieved 22 Oct 2026). Licence: CC BY 4.0
• Changing a major domestic building contract - checklist | Consumer Affairs Victoria — Consumer Affairs Victoria (retrieved 22 Oct 2026). Licence: CC BY 4.0
• Better domestic building insurance | vic.gov.au — Victorian Government (retrieved 22 Oct 2026). Licence: CC BY 4.0
• Time limits and amounts for Home Warranty | Building and Plumbing Commission — Building and Plumbing Commission (Victoria) (retrieved 22 Oct 2026). Licence: CC BY 4.0
• What Home Warranty may cover | Building and Plumbing Commission — Building and Plumbing Commission (Victoria) (retrieved 22 Oct 2026). Licence: CC BY 4.0
• Apply to Domestic Building Dispute Resolution Victoria (DBDRV) — Consumer Affairs Victoria (retrieved 1 Aug 2026). Reuse terms: see the publisher's site
• Domestic building insurance and insolvency | Consumer Affairs Victoria — Consumer Affairs Victoria (retrieved 22 Oct 2026). Licence: CC BY 4.0

Figures on this page are drawn from Delora's local knowledge graph, refreshed from these primary sources and checked for changes on a regular schedule. If a figure here looks out of date, the official source above is always the authority — please let us know.