From 1 August 2017, the threshold amount for a major domestic building contract increased from $5,000 to $10,000, and the threshold amount above which cost plus contracts are permitted increased from $500,000 to $1 million.
Work requiring a major domestic building contract
You must have a major domestic building contract, in writing, with your client for work worth more than $10,000, including:
- erecting or constructing a home and associated work (for example, landscaping, paving, retaining structures, driveways, fencing, lighting, heating, air conditioning, water supply or sewerage)
- renovations, alterations, extensions, repairs and any other improvements to a home
- work associated with renovation, alteration, extension or repair of a home. This includes work such as landscaping, paving, retaining structures, driveways, fencing, garages, workshops, swimming pools or spas
- preparation of plans or specifications for the work
- demolition or removal of a home
- any work associated with building on residential-zoned land and for which a building permit is required
- any site work, including work to ensure access to the property.
However, we recommend you use a written contract for all building work, including work worth $10,000 or less. This helps to:
- ensure you and your client are clear about the work to be carried out
- resolve any disputes that may arise.
You must give your client a copy of the Domestic Building Consumer Guide before they sign a major domestic building contract. For more information, view Domestic Building Consumer Guide.
Work not requiring a major domestic building contract
A major domestic building contract is not required for jobs that involve only one of the following:
- tiling (wall and floor)
- electrical work
- plumbing, gas-fitting and draining
- installing floor coverings
- attaching external fixtures (awnings, security screens, insect screens and balustrades)
- erecting a chain wire fence around a tennis court
- erecting a mast, pole, antenna, aerial or similar structure.
Even if your client is an owner-builder on the building permit, you must still:
- be registered with the Victorian Building Authority to handle a contract worth more than $10,000, or to reblock, restump, demolish or remove a home regardless of the value of this work
- use a major domestic building contract for work worth more than $10,000
- provide domestic building insurance for work worth more than $16,000.
You must take out domestic building insurance for the client if the work is worth more than $16,000.
Model domestic building contract for new homes
You can use our free model domestic building contract when planning to build a new home. The contract balances your and your client’s rights and obligations. If a dispute arises, the contract provides a clear path to the requirements of the law.
Download a copy of the Building contract for new homes (Word, 1.2MB)