How much deposit can a builder ask for? Limits by state
The legal deposit cap, the written contract threshold and the insurance threshold for home building work in every state and territory, in one table.
How much deposit can a builder or tradie ask for? In most of Australia the answer is set by law, and it depends on the state and the size of the job. The same rules decide when a home building contract has to be in writing and when the builder needs home warranty insurance (called HBCF in NSW and domestic building insurance or Home Warranty in Victoria). This guide puts every state and territory in one table, with a link to the regulator for each, so homeowners know what is fair to pay and tradies know what they are allowed to ask.
Deposit limits and contract thresholds by state
| State | Maximum deposit | Written contract | Insurance before payment |
|---|---|---|---|
| NSW | 10% of the contract price | Over $5,000 incl. GST. Small works contract for $5,000 to $20,000; a full home building contract over $20,000 | Home Building Compensation Fund (HBCF) cover when the contract is over $20,000 |
| VIC | 10% if the contract is under $20,000; 5% at $20,000 or more | Major domestic building contract for work over $10,000 | Home Warranty for work over $20,000 (homes up to 3 storeys) on contracts signed from 1 July 2026. Earlier contracts: domestic building insurance over $16,000 |
| QLD | 20% up to $3,300; 10% from $3,301 to $19,999; 5% at $20,000 or more. Up to 20% if more than half the work by value is made off-site | Over $3,300, including labour, materials and GST | Queensland Home Warranty Scheme for most residential work over $3,300 |
| WA | 6.5% of the contract price | In writing and signed, for fixed-price contracts from $7,500 to $500,000 | Home indemnity insurance for work that needs a building permit and is valued over $20,000 |
| SA | 5% if the contract is over $20,000 (plus approved third-party costs such as council fees). Under $20,000: check with Consumer and Business Services | Over $20,000 | Building indemnity insurance over $20,000 |
| TAS | 10% under $50,000; 5% at $50,000 or more; 20% if off-site work is more than half the price | The contracts Act covers work of $20,000 or more, and those contracts must be in writing | Check with CBOS |
| ACT | No legislated limit (the ACT Government says up to 10% is usual) | Not required by law, but strongly recommended | Residential building work insurance or a fidelity fund certificate for work over $12,000 on some residential buildings |
| NT | Check with the NT Government | Check with the NT Government | Fidelity fund certificate for prescribed residential work (new homes, units up to three storeys, and extensions over $25,000 that add floor area) before the builder asks for payment |
Builder deposit in NSW: the details that trip people up
NSW has a flat 10% cap. The NSW Government's guide for builders is blunt about it: you cannot ask for more. Above $5,000 including GST, the job needs a written contract, and the guide says that also applies when the price isn't known but the reasonable cost of labour and materials is over $5,000. Above $20,000 the contract needs to be the full form, and the builder has to give you an HBCF insurance certificate.
You will still see websites saying NSW deposits drop to 5% on bigger jobs. That is out of date. The current guide says 10%.
Maximum deposit for a builder in VIC and QLD
Victoria and Queensland both step the cap down as the job gets bigger. In Victoria it is 10% under $20,000 and 5% from $20,000. Victoria also changed its insurance on 1 July 2026: contracts signed from that date for work over $20,000 come under the new Home Warranty scheme run by the Building and Plumbing Commission. Contracts signed before then keep the old domestic building insurance, which kicked in above $16,000.
Queensland has three tiers (20%, 10% and 5%) and the lowest thresholds in the country: a written contract and home warranty cover start once the work is worth more than $3,300. The QBCC also allows up to 20% where more than half the work by value is built off-site, such as custom cabinetry or a prefabricated shed.
How much deposit should I pay a builder?
If you're the homeowner, the legal cap is a ceiling, not a target. A few habits protect you on any job:
- Don't pay more than the cap. A request for a bigger deposit is a warning sign, and paying more than the law allows leaves more of your money at risk if the job goes wrong.
- See the insurance first. Where insurance is required, ask for the certificate before you pay anything, and check it with the insurer or scheme.
- Check the licence. Our guide on how to check a tradie's licence links to every state's free register.
- Pay progress payments for work done. After the deposit, each payment should match a stage that is actually finished.
- Keep it in writing. Even on small jobs where a contract isn't required, get a written quote that sets out the scope, the price and the payment terms.
If you're comparing several builders, our guide to comparing tradie quotes covers what else to look at besides the deposit.
For tradies: setting deposits the right way
Deposits protect your cash flow, especially when you buy materials up front. A few things keep them on the right side of the law:
- Work out the cap from the total contract price, including GST, and check which band the job falls into in your state.
- Never split one job into several smaller contracts to get under a contract or insurance threshold.
- Arrange insurance before you take money, where your state requires it.
- Put the deposit amount, the progress stages and what triggers each payment in your quote. Our guide on what to put on a quote sets out the rest.
- If you're a subcontractor chasing a progress payment from a builder, a different set of laws applies. See payment claim vs invoice.
How BizzMate helps
In BizzMate you write the payment terms into the quote, including the deposit and the stages, and the customer accepts, declines or asks for changes online. An accepted quote converts into an invoice, with GST on its own line and your ABN on the page, and invoices are locked once sent. Try it free for 14 days. If you're a homeowner looking for a tradie, post your job on the BizzMate marketplace.
This guide is general information, not legal or financial advice. Building laws differ by state and change often, so check with your state's regulator or a lawyer before you sign or issue a contract.
Read next
How to check a tradie's licence in Australia
Which work needs a licence, where each state lets you look one up for free, what the result should show, and what a licence doesn't tell you.
8 min read GuideWhat to put on a quote in Australia
Who you are, what you'll do and what you won't, the price shown the way consumer law expects, how long it stands, and how the customer says yes.
9 min read BusinessPayment claim vs invoice: security of payment for tradies
When an invoice becomes a payment claim, what NSW, Victoria and Queensland require, payment schedules, and the adjudication deadlines.
8 min read