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Victorian home owners planning to build or renovate now benefit from stronger protections against unscrupulous builders, following the state’s passage of new building reforms.
New domestic building contract laws in Victoria have been unveiled by the Allan Labor government in a bid to protect further Victorians building or renovating their homes.
Passed mid-September 2025, the Domestic Building Contracts Amendment Act streamlines rules for home building and renovations, boosting consumer protection and giving home owners greater confidence when working with builders
The new laws, which will take effect on 1 December 2026, also support the establishment of the Building and Plumbing Commission (BPC) by transferring powers from Consumer Affairs Victoria to the Victorian Building Authority.
The new BPC will centralise all aspects of building quality, including regulation, insurance and dispute resolution, under a single agency.
According to the Victorian government, the new set of reforms will boost the state’s housing construction while providing stability and certainty to industry and consumers.
Set in consultations with multiple industry peak bodies, the reforms aim to make domestic building contracts fairer, more transparent, and protective for Victorians.
The new reforms have updated rules around payments, including deposit limits, progress payment stages, and payment caps.
Cost escalation clauses will now be permitted to manage unexpected increases in building costs, subject to price ceilings and safeguards that protect consumers.
The definition of domestic building work has also been aligned with other jurisdictions by removing the requirement for the preparation of plans, specifications, and bills of quantity.
Additionally, the process for ending contracts has been simplified, making it easier for home owners to exercise their rights.
Minister for Consumer Affairs, Nick Staikos, said the reforms will improve the quality of builds through the states by delivering safer, durable, and more compliant projects.
“For many families, their home is the single largest investment they will make in their lifetime – which is why it’s critical that domestic building contracts are clear and fair.”
The changes in the Domestic Building Contracts Act followed the 2023 fiasco of the Porter Davis Homes collapse.
In 2023, major Victorian home builder Porter Davis went into liquidation, halting construction on over 1,500 homes across the state, leaving thousands of “mum and dad” home owners in uncertainty.
Additionally, the liquidation had sparked public outrage, with affected home owners reporting paying large deposits and waiting years for builds, only to find construction had stopped and communication from the company was limited.
Home owners, some of whom had been renting while waiting to move into their new homes, faced financial losses of hundreds of thousands of dollars.
Since 2023, the number of builders and contractors under fire for dodgy or unfinished projects in Victoria has been rising, with BPC ramping up enforcement, in September 2025, with a record 60 prosecutions underway.
Minister for Housing and Building, Harriet Shing, said the changes were essential for both owners and industry professionals.
“These changes are another important part of putting consumers at the heart of a better building sector, and they also provide industry with the flexibility needed to respond to demand,” Shing concluded.
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