What must a NSW home building contract include?

By BuilderVet team. Last reviewed 2 November 2026.

In NSW, residential building work needs a written contract when the price is over $5,000 including GST, or when the price isn’t known but the reasonable market cost of labour and materials is over $5,000. Jobs from $5,000 to $20,000 need a small jobs contract, and jobs over $20,000 need a large jobs contract with extra terms like a progress payment schedule, the cost of home building compensation cover and a five clear business day cooling-off statement.

This guide sets out what each contract must contain, the payment rules, and what to check before you sign. It is general information, not legal advice. For the conversation with your builder before you get to the contract, see our questions to ask a builder before signing.

Which contract do I need?

The value includes labour and materials. Building Commission NSW publishes free home building contracts for work over $5,000 up to $20,000, and for work over $20,000. Builders can also use an industry association contract or their own, as long as it meets the requirements.

What must a small jobs contract include?

A small jobs contract must be dated and signed by, or on behalf of, each party. It must contain:

• the parties’ names, including the name of the contractor licence holder exactly as shown on the licence
• the contractor licence number
• a description of the work, and any plans or specifications
• the contract price, if known
• a quality of construction clause saying the work will comply with the Building Code of Australia, other relevant codes and standards, and any development consent or complying development certificate conditions
• a clause about when the contractor’s liability under that clause may be limited because of your own design or specification
• an information sheet about registered certifiers and your freedom to choose one, if a certifier is needed

What extra must a large jobs contract include?

Large jobs contracts must include everything that matters for a bigger build. The NSW Government lists:

• the date and both parties’ signatures
• your name and the exact name and number on the contractor’s licence
• a sufficient description of the work, with plans and specifications attached
• the statutory warranties required by the Home Building Act 1989
• the contract price, prominently displayed on the first page, with a warning and explanation if it is unknown or may change
• the cost of home building compensation cover, if insurance is required
• a progress payment schedule
• a termination clause
• a checklist of 17 items, and a caution not to sign unless you can answer yes to all of them
• a note that you are entitled to a copy of the signed contract within five days
• a note that the contractor must give you an HBC insurance certificate
• a statement of the cooling-off period of five clear business days
• your acknowledgement that you read the Consumer Building Guide and completed the checklist
• clauses saying variations form part of the contract and must be in writing and signed by both of you
• the quality of construction clause and the limitation clause

The builder must give you a copy of the signed contract within five business days. Weekends, NSW public holidays and 27 to 31 December don’t count.

What are the payment rules?

Deposit. A builder can’t ask for a deposit of more than 10% of the contract price. This applies to small and large jobs.

Insurance first. For jobs over $20,000, don’t pay the deposit until you have the HBC certificate and have checked it is valid. Our guide to verifying home building compensation insurance in NSW shows how.

Progress payments. A large jobs contract may only use these types of progress payment:

1. fixed payments after specified stages of work are completed, as a set amount or percentage, with stages described in plain language
2. payments as work is performed and costs are incurred, which may include a margin, supported by invoices, receipts or other documents
3. a combination of the two

The NSW Government says progress payments should be for work actually done, not time on the job, and the dollar value of each stage should be realistic.

What else should I check before signing?

The NSW Government flags several traps:

• Licence in the right name. A licence held by an individual doesn’t let their company make the contract, even if they are a director. If a company is contracting, it needs a licence in its own name.
• Termite control. Make sure nothing makes you responsible for termite control instead of the builder.
• Arbitration clauses. These aren’t permitted in a home building contract and are void.
• Changes to standard contracts. Get legal advice if the builder has amended a standard contract or added special conditions.
• Warranties. Statutory warranties apply even if the contract doesn’t mention them. See our guide to building defect warranty time limits.

You can ask for changes. If you’re unhappy with the contract, don’t sign.

Checklist: your contract review

• Contract type matches the job value (small or large)
• Licence name and number on the contract match the Service NSW licence check
• Contracting party is the licensed entity, not a related company
• Price is on page one, with any warning if it may change
• Plans and specifications are attached
• Deposit is 10% or less
• Progress payments are tied to completed stages or documented costs
• HBC certificate received and checked before any payment (jobs over $20,000)
• Cooling-off statement included (jobs over $20,000)
• Variations must be written and signed by both parties
• No arbitration clause
• You’ve read the Consumer Building Guide

Worked example: a $180,000 extension

Lena is offered a contract for a $180,000 rear extension. The contract asks for a $27,000 deposit and has a payment of $40,000 “after week six”.

We’d flag three issues. First, $27,000 is 15% of the price, above the 10% cap of $18,000. Second, “after week six” ties payment to time, not to a completed stage of work. Third, the contract is in the name of a company, but the licence Lena found belongs to the director personally. She asks for these to be fixed, checks the HBC certificate, and only then pays a deposit.

How BuilderVet helps

Before you sign, run the free check on the exact entity named in the contract. If you’re building in NSW, Build Watch keeps an eye on that builder for 24 months for a one-off A$79 and tells you if their record changes.

Frequently asked questions

Do I need a written contract for a $4,000 job?

Not under the Home Building Act. A written contract is required when the price, or the reasonable market cost, is over $5,000 including GST. A written quote is still a good idea.

What is the maximum deposit for building work in NSW?

10% of the contract price, for both small and large jobs.

Can I use the builder’s own contract?

Yes, as long as it includes everything the law requires. Building Commission NSW also publishes free contracts, and industry associations sell them.

How long does the builder have to give me a copy?

Five business days after you sign. Weekends, NSW public holidays and 27 to 31 December don’t count.

Are arbitration clauses allowed?

No. The NSW Government says arbitration clauses aren’t permitted in a home building contract and are void.

Do variations need to be in writing?

Yes. For large jobs, the contract must say variations must be in writing and signed by both you and the contractor.

Does the contract have to mention warranties?

A large jobs contract must include them, but statutory warranties apply to your work even if they aren’t written into the contract.

Sources

• NSW Government, Contracts for residential building work, https://www.nsw.gov.au/housing-and-construction/building-or-renovating-a-home/preparing/contracts (checked 2026-11-02)
• NSW Government, Guide to providing home building contracts, https://www.nsw.gov.au/housing-and-construction/compliance-and-regulation/your-obligations-to-your-customers/guide-to-providing-home-building-contracts (checked 2026-11-02)
• NSW Government, Consumer Building Guide, https://www.nsw.gov.au/housing-and-construction/compliance-and-regulation/your-obligations-to-your-customers/how-to-use-consumer-building-guide/guide (checked 2026-11-02)

Last reviewed 2 Nov 2026