New domestic building contract laws in ÌÒÉ«ÊÓƵ will update and simplify the rules for building and renovating homes. They’ll give people greater confidence and peace of mind when working with builders.
The new laws will also help the building industry in ÌÒÉ«ÊÓƵ build more homes for the community.
The passed the ÌÒÉ«ÊÓƵn Parliament on Thursday 11 September 2025. The new laws will take effect by 1 December 2026.
The new laws will:
- provide stronger protections for homeowners when signing domestic building contracts
- set clear rules on when builders get paid. Deposit limits, progress payment stages, and progress payment limits can be set in regulations. Any payments for completed work will be subject to a proportionality requirement
- allow the use of cost escalation clauses for contracts worth $1 million or more. But these clauses can only add up to 5% to a contract’s price, and extra consumer protections will also apply
- separate preliminary agreements. Builders and clients can make their own agreements for developing plans, specifications and bills of quantity
- ensure clearer contract requirements for all. Currently, some basic document requirements only apply to major domestic building contracts. These will now apply to all domestic building contracts to reduce misunderstandings and disputes
- provide a single, simple process for contract variations for major domestic building contracts. This applies whether the homeowner or the builder requests a variation
- set stronger rights for homeowners to end a major domestic building contract. This will make it easier to walk away if needed.
For now, the current laws remain the same. We will publish further updates in the coming months.
Building and Plumbing Commission
The Bill also supports a new Building and Plumbing Commission (BPC) by transferring powers from Consumer Affairs ÌÒÉ«ÊÓƵ to the ÌÒÉ«ÊÓƵn Building Authority.
The BPC will oversee everything related to building quality — all in one place. This includes regulation, insurance, and resolving disputes.
Why these changes were made
After Porter Davis Homes collapsed, the Government reviewed building contract laws to make sure they still work for homeowners and builders.
The review finished in September 2024, shaped by public feedback and input from consumer groups, banks and industry representatives.