The building contract is the most important document in your project. It decides what you are paying for, when you pay, what happens if something changes and what protects you if things go wrong. Yet plenty of homeowners sign one after skimming the first page.
Here is what a Victorian domestic building contract should include in 2026, the rules that protect you, and the questions to ask before you sign.
The Essentials Every Contract Should Cover
In Victoria, most domestic building work over $10,000 needs a major domestic building contract. At a minimum, it should clearly set out:
- The contract price, and whether it is fixed
- Plans and specifications detailed enough that both sides know exactly what is being built
- What is included and what is not. Site costs, demolition, driveways, landscaping, fencing and window coverings are common gaps.
- Prime cost and provisional sum items, each with an itemised estimate
- The progress payment schedule, tied to completed stages
- The start date and the number of days to complete the work, plus allowances for delays such as wet weather
- Home Warranty insurance details for work over $20,000
- The cooling-off notice
- The builder’s registration details and who is responsible for permits
Deposits: How Much Is Too Much
Victorian law caps the deposit a builder can ask for:
- 10% if the contract price is under $20,000
- 5% if the contract price is $20,000 or more
If a builder asks for more than that up front, treat it as a red flag. Don’t pay any deposit until you have the insurance certificate for your property.
Progress Payments: Pay for Work That Is Finished
You pay for each stage once it is complete, not in advance. For a contract to build all stages, the standard schedule is:
| Stage | % of contract price | Complete when |
|---|---|---|
| Base | 10% | Footings and slab (or stumps) are done |
| Frame | 15% | The frame is complete and approved by the building surveyor |
| Lock-up | 35% | Roof, cladding, external doors and windows are fixed |
| Fixing | 25% | Internal linings, cabinetry, doors and fittings are fixed |
| Completion | Balance | Work is complete and handed over |
Before each payment, check the stage has passed the surveyor’s inspection and matches the contract. An independent building inspector can do this for you. Consumer Affairs Victoria explains the schedule in full on its deposits and payments page.
Prime Cost Items and Provisional Sums
These are the most common reason a final price ends up higher than the contract price.
- Prime cost items are fixtures and fittings, such as tapware, tiles or an oven, where the exact product is not chosen when you sign. The contract carries an allowance instead.
- Provisional sums cover work that can’t be priced exactly yet, such as excavation or rock removal.
Your contract must list each one with an itemised estimate, and your builder must show you the invoices. Low allowances make a quote look cheaper than it really is, so the fewer of these in your contract, the more certain your price.
Variations: Every Change in Writing
A variation is any change to the plans or specifications after the contract is signed. The rule is simple: the change, its cost and its effect on the completion date must be agreed in writing before the work is done. The only exception is a minor change that won’t need a permit change, won’t cause a delay and won’t add more than 2% to the contract price.
You also should not have to pay for variations to fix problems your builder should have picked up before starting, such as rock that a proper soil report would have shown.
The Cooling-Off Period
After you receive a signed copy of a major domestic building contract, you have five business days to change your mind. If you withdraw, the builder can keep $100 plus any out-of-pocket expenses you approved. You don’t get a cooling-off period if you had a lawyer review the contract before signing, or if you previously signed a substantially similar contract with the same builder for the same home.
Home Warranty Insurance From 1 July 2026
From 1 July 2026, Home Warranty replaced Domestic Building Insurance for new contracts in Victoria. Key points for homeowners:
- It applies to eligible domestic building work over $20,000, on buildings up to three storeys
- The Building and Plumbing Commission is the only provider
- It can cover incomplete, defective or non-compliant work, not just a builder dying, disappearing or going broke
- Cover is up to $400,000 per home, and major defects can be covered for up to six years after completion
- It does not cover work by unregistered builders
Confirm your builder is registered, and ask to see the Home Warranty details for your project. The Building and Plumbing Commission has the full eligibility rules.
Changes Coming in 2027
The Domestic Building Contracts Amendment Act 2025 will update the rules again. The Victorian Government has deferred its start to 31 March 2027. The changes include raising the major domestic building contract threshold from $10,000 to $20,000, a single process for variations, plain-language contracts, and stronger rights to end a contract if the price or completion time blows out. Contracts signed before the start date stay under the current rules.
Questions to Ask Before You Sign
- Is the price fixed, and what could still change it?
- What is excluded, and what will those items cost me separately?
- How many prime cost items and provisional sums are there, and how were the allowances worked out?
- Has a soil test and site survey been done?
- What is the start date and the number of days to complete?
- Who is my single point of contact during the build?
- How will variations be priced and approved?
If you are still choosing a builder, our guide to choosing a builder in Shepparton covers what to check. If you have quotes that are far apart, read why two builders quote different prices for the same job.
Clear Contracts, No Surprises
Roweanne Builders quotes at a fixed price, and any variation is agreed with you in writing before we proceed. We are happy to walk you through every clause before you sign. Call (03) 5822 2225 or get in touch.
FAQs
What is the maximum deposit a builder can take in Victoria?
5% of the contract price for contracts of $20,000 or more, and 10% for contracts under $20,000.
Can my builder charge more than the contract price?
Only in limited ways, such as agreed variations and adjustments to prime cost and provisional sum items. Anything else needs legal advice or a call to the Building Information Line on 1300 55 75 59.
Do I need Home Warranty insurance for a renovation?
If the contract is for eligible domestic building work over $20,000 signed from 1 July 2026, your builder must arrange Home Warranty insurance through the Building and Plumbing Commission.
Should I get a lawyer to check my building contract?
It is a good idea for a large project. Just note that if a lawyer reviews the contract before you sign, you lose the five-day cooling-off period.
This article is general information only and is not legal advice. Rules change, so check the current requirements with Consumer Affairs Victoria or the Building and Plumbing Commission, or get legal advice, before you sign.