# How to choose a home builder in Australia

*Digital Pages Editorial · 2026-08-03*

A New South Wales builder cannot legally start work worth more than $20,000 without first arranging Home Building Compensation Fund cover, and in Queensland that same trigger point sits at just $3,300. Those two numbers alone show why "get insurance" isn't specific enough advice when you're hiring a builder: every state runs its own regulator, its own licence register and its own dollar thresholds for contracts, deposits and warranty cover. Getting the checks in the right order, licence first, then contract, then deposit, then insurance, before any money changes hands is what keeps a build out of a tribunal.

Start your shortlist from [licensed home builders on Digital Pages](/home-builders), then run every name through the checks below before you sign anything.

## Is the builder licensed to do the work?

In NSW, any residential building work worth more than $5,000 in labour and materials, including GST, needs a licensed contractor. Specialist trades, wiring, plumbing, draining, gasfitting, and air conditioning or refrigeration work, need a licence at any value. Service NSW's online licence check lets you search by licensee name, licence number, ABN, ACN or location, and confirms whether a contractor's licence is current before you sign anything.

Victoria requires a builder to be registered with the Building and Plumbing Commission (BPC) before they can take on domestic building work valued over $10,000, or any reblocking, restumping or demolition job regardless of value. The BPC now runs Victoria's building practitioner register, formerly held by the Victorian Building Authority.

Queensland requires a QBCC licence for residential building work worth more than $3,300, and for plumbing, drainage, gasfitting or fire protection work at any value. If a name doesn't come up on the QBCC's public register, there's a good chance the person isn't licensed.

Full instructions for checking each state's register are in [Digital Pages' builder licence check guide](/kb/builder-licence-check-by-state).

## Does HIA or Master Builders membership mean the builder is licensed?

No. The Housing Industry Association (HIA) and Master Builders, sometimes still called the MBA, are industry associations a builder joins and pays for voluntarily. They are not licences and they are not issued by a state regulator. Master Builders Australia describes itself as the national voice of the building industry, representing eight state and territory associations and around 32,000 members nationwide, membership that offers business support, contracts and industry advocacy, not a government check on qualifications or insurance eligibility. A logo on a website or van tells you a builder pays membership fees to an association. It doesn't tell you their licence is current, and it isn't a substitute for checking the state register yourself.

## When does my builder need home warranty insurance?

Every state calls this insurance something different, and the dollar trigger is different too.

| State | Scheme | Required above | Administered by |
|---|---|---|---|
| NSW | Home Building Compensation Fund (HBCF) | $20,000 | icare |
| VIC | Domestic building insurance | $16,000 | Approved insurers (regulated under the Domestic Building Contracts Act) |
| QLD | Queensland Home Warranty Scheme | $3,300 | QBCC |

In NSW, icare's HBCF is a last resort, not a day-to-day warranty. It only pays out if the builder becomes insolvent, dies, disappears, or has their licence suspended for ignoring an NCAT or court money order, not simply because you and the builder disagree about the work. Cover runs up to six years for major defects, two years for other defects, and 12 months for work that never started or stopped. The certificate of insurance has to be in your hands before you pay a deposit or let work begin.

Victoria's domestic building insurance applies to work worth more than $16,000. The builder must give you a copy of the policy and a certificate of currency covering your specific property before taking a deposit or any other payment. It covers you if the builder dies, is declared insolvent, or disappears before the work is finished, up to $300,000 to fix structural defects within six years, and non-structural defects within two years.

Queensland's scheme starts far earlier, at $3,300, and pays up to $200,000 per home for non-completion or defective work. It only covers non-completion claims on fixed-price contracts. Cost-plus and construction management contracts lose that protection entirely, since there's no fixed price to measure a non-completion claim against.

## When do I need a written contract, and how much deposit can they ask for?

In NSW, a written contract is compulsory for any job over $5,000. Jobs worth $5,000 to $20,000 need a small jobs contract with basic terms. Jobs over $20,000 need a full home building contract. The maximum deposit is 10 per cent of the contract price, and progress payments listed in the contract must match work actually done, not time spent on the job.

Victoria requires a major domestic building contract once the price passes $10,000. The deposit cap then depends on price: 10 per cent if the contract is under $20,000, five per cent if it's $20,000 or more. Victorian law also fixes how much can be claimed at each build stage, base, frame, lock-up and fixing, so a builder can't invoice ahead of work actually completed on site.

Queensland needs a written contract once a job passes $3,300. The deposit cap has three tiers: 20 per cent for work valued at $3,300 or less, 10 per cent for $3,301 to $19,999, and five per cent for $20,000 and over. A 20 per cent deposit is allowed above that if more than half the contract price is customised, off-site prefabricated work such as kitchen cabinetry or sheds.

Full contract requirements for every state are in [Digital Pages' guide to domestic building contracts](/kb/domestic-building-contracts).

## How do progress payments work?

Progress payments should track work actually completed on site, not the calendar. In Queensland, a contractor can't claim more than 50 per cent of the contract price, including the deposit, until at least half the on-site work is done. Discuss the payment schedule and what triggers each claim before you sign, since uncertainty about when a payment falls due is one of the most common causes of building disputes.

## What are the red flags before I sign?

- A deposit request above the legal cap for your state and contract value. QBCC's own advice is that you are not obliged to pay it, and if you overpay, you can't recover the excess later through a home warranty claim.
- A contractor who won't provide a certificate of insurance, or one made out to a different property, before taking your deposit.
- A licence or registration number that doesn't return a result on the state register, or comes back suspended or cancelled.
- Pressure to sign quickly to "lock in" a price before you've had time to read the contract or get advice.
- Insistence on a cost-plus or construction management contract in Queensland, which strips out non-completion cover under the Home Warranty Scheme.

## What should I ask, and how do I check past work?

Ask for two or three recent clients you can call directly, not just testimonials on the builder's website, and ask to see a recent, similar job in person where you can. The same state registers that confirm a current licence in NSW, Victoria and Queensland also carry disciplinary history in some cases, so a valid licence is still worth cross-checking rather than treating as the final word.

Confirm in writing who carries the insurance for the job, what the deposit will be and when it's due, and what stage triggers each progress payment. Ask for the certificate of insurance before you pay anything, and check it names your address, not a different project.

## Frequently asked questions

### Does HIA or Master Builders membership mean a builder is licensed?

No. HIA and Master Builders are industry associations a builder joins voluntarily. Neither issues a state building licence. Always check the builder's licence or registration directly with the state regulator, not just their association logo.

### How much deposit can a builder legally ask for?

NSW caps every deposit at 10 per cent of the contract price. Victoria allows 10 per cent under $20,000 and 5 per cent at or above it. Queensland runs three tiers: 20 per cent up to $3,300, 10 per cent from $3,301 to $19,999, and 5 per cent from $20,000 up.

### What happens if my builder becomes insolvent partway through the job?

In NSW, icare's Home Building Compensation Fund can cover the cost of finishing or fixing the work once the builder is insolvent, has died, disappeared, or had their licence suspended for ignoring a money order. Victoria's domestic building insurance and Queensland's home warranty scheme work on the same last-resort principle: they step in only once the builder can no longer meet their obligations, not for ordinary disputes over quality or delay.

### Do I need a written contract for a small job?

NSW requires a written contract above $5,000. Victoria requires a major domestic building contract above $10,000. Queensland requires one above $3,300. Below those figures a written contract is not legally required, though every regulator recommends getting one anyway to avoid disputes over price or scope.

## Sources

- [NSW Government — Contracts for residential building work](https://www.nsw.gov.au/housing-and-construction/building-or-renovating-a-home/preparing/contracts)
- [Service NSW — Check a builder or tradesperson licence](https://www.service.nsw.gov.au/transaction/check-a-builder-or-tradesperson-licence)
- [icare — What is icare HBCF and why do I need it?](https://www.icare.nsw.gov.au/builders-and-homeowners/homeowners/what-is-icare-hbcf)
- [Consumer Affairs Victoria — Becoming a registered building practitioner](https://www.consumer.vic.gov.au/licensing-and-registration/builders-and-tradespeople/becoming-a-registered-building-practitioner)
- [Consumer Affairs Victoria — Deposits and payments for domestic building](https://www.consumer.vic.gov.au/licensing-and-registration/builders-and-tradespeople/running-your-business/deposits-and-payments)
- [Consumer Affairs Victoria — Domestic building insurance](https://www.consumer.vic.gov.au/licensing-and-registration/builders-and-tradespeople/running-your-business/warranties-and-insurance/domestic-building-insurance)
- [QBCC — What is home warranty insurance](https://www.qbcc.qld.gov.au/home-owner-hub/queensland-home-warranty-scheme/what-home-warranty-insurance)
- [QBCC — Deposits and progress payments](https://www.qbcc.qld.gov.au/home-owner-hub/build-renovate/contracts-payments/deposits-progress-payments)

## FAQ
**Does HIA or Master Builders membership mean a builder is licensed?**

No. HIA and Master Builders are industry associations a builder joins voluntarily. Neither issues a state building licence. Always check the builder's licence or registration directly with the state regulator, not just their association logo.

**How much deposit can a builder legally ask for?**

NSW caps every deposit at 10 per cent of the contract price. Victoria allows 10 per cent under $20,000 and 5 per cent at or above it. Queensland runs three tiers: 20 per cent up to $3,300, 10 per cent from $3,301 to $19,999, and 5 per cent from $20,000 up.

**What happens if my builder becomes insolvent partway through the job?**

In NSW, icare's Home Building Compensation Fund can cover the cost of finishing or fixing the work once the builder is insolvent, has died, disappeared, or had their licence suspended for ignoring a money order. Victoria's domestic building insurance and Queensland's home warranty scheme work on the same last-resort principle.

**Do I need a written contract for a small job?**

NSW requires a written contract above $5,000. Victoria requires a major domestic building contract above $10,000. Queensland requires one above $3,300. Below those figures a written contract is not legally required, though every regulator recommends getting one anyway.

## Sources
- [NSW Government — Contracts for residential building work](https://www.nsw.gov.au/housing-and-construction/building-or-renovating-a-home/preparing/contracts)
- [Service NSW — Check a builder or tradesperson licence](https://www.service.nsw.gov.au/transaction/check-a-builder-or-tradesperson-licence)
- [icare — What is icare HBCF and why do I need it?](https://www.icare.nsw.gov.au/builders-and-homeowners/homeowners/what-is-icare-hbcf)
- [Consumer Affairs Victoria — Becoming a registered building practitioner](https://www.consumer.vic.gov.au/licensing-and-registration/builders-and-tradespeople/becoming-a-registered-building-practitioner)
- [Consumer Affairs Victoria — Deposits and payments for domestic building](https://www.consumer.vic.gov.au/licensing-and-registration/builders-and-tradespeople/running-your-business/deposits-and-payments)
- [Consumer Affairs Victoria — Domestic building insurance](https://www.consumer.vic.gov.au/licensing-and-registration/builders-and-tradespeople/running-your-business/warranties-and-insurance/domestic-building-insurance)
- [QBCC — What is home warranty insurance](https://www.qbcc.qld.gov.au/home-owner-hub/queensland-home-warranty-scheme/what-home-warranty-insurance)
- [QBCC — Deposits and progress payments](https://www.qbcc.qld.gov.au/home-owner-hub/build-renovate/contracts-payments/deposits-progress-payments)