Notice of Preparation of Regulatory Impact Statement

Proposed Domestic Building Contracts Amendment Regulations 2026

I, Hon. Nick Staikos MP, Minister for Housing and Building and a Minister responsible for administering the Domestic Building Contracts Act 1995, give notice in accordance with section 11 of the Subordinate Legislation Act 1994 that a Regulatory Impact Statement (RIS) has been prepared in relation to the proposed Domestic Building Contracts Amendment Regulations 2026 (the proposed Regulations).

The proposed Regulations, to be made under the Domestic Building Contracts Act 1995, will amend the Domestic Building Contracts Regulations 2017 and support the implementation of reforms made by the Domestic Building Contracts Amendment Act 2025, which strengthen consumer protections while supporting innovation, productivity and growth in Victoria's residential building sector. The proposed Regulations will modernise the domestic building contract framework, by, among other things, updating domestic building contract payment arrangements to better reflect contemporary construction practices, including the increasing use of modern methods of construction (MMC).

The objectives of the proposed Regulations are to:

1. fix, at $20,000, the amount of a contract price, above which a domestic building contract becomes a major domestic building contract (as defined in the Domestic Building Contracts Act 1995);
2. prescribe limits on the amount of a deposit that a builder can demand or receive from a building owner and considering the amount of MMC used under the domestic building contract;
3. prescribe circumstances of delay which do not permit the use of cost escalation clauses;
4. prescribe documents that may evidence increased costs to the builder in relation to the use of cost escalation clauses, and which a builder must give to a building owner upon receipt;
5. prescribe the form a builder must give an owner notice of the effect of a cost escalation clause in a domestic building contract;
6. prescribe what is MMC;
7. for certain major domestic building contracts to build a home that use less than 30% MMC, prescribe for the contract, progress stages and percentage payments in relation to those stages;
8. prescribe contracts for the purposes of section 40(3) of that Act;
9. prescribe information about the statutory insurance scheme that must be included in a major domestic building contract; and
10. prescribe other consequential matters.
    

The RIS:

• assesses three regulatory options for implementing payment arrangements for major domestic building contracts to build a home, that incorporate different levels of MMC;
• assesses options for deposit limits that balance consumer protection with the higher upfront costs associated with off-site manufacturing;
• examines alternative approaches regarding progress payment stages and percentages for major domestic building contracts to build a home, that use both traditional construction methods and MMC;
• assesses the proposed prescribed MMC and the proposed increase to the amount above which a domestic building contract becomes a major domestic building contract;
• evaluates the expected costs and benefits of each option for consumers, builders and the broader residential construction sector; and
• concludes that the preferred option provides the greatest net benefit while supporting consumer confidence and encouraging innovation in residential construction.

Accessing the RIS and making a submission

You can obtain a copy of the RIS and the proposed Regulations from the Engage Victoria website at www.engage.vic.gov.au or by phoning 03 9655 6666.

All comments and submissions must be received by 5.00 pm on Wednesday 16 September 2026.

You can provide feedback on the RIS and proposed Regulations by one of the following methods:

• Via the Engage Victoria website (preferred method);
• By email to building.policy@transport.vic.gov.au; or

• By post to:

  Domestic Building Contracts Amendment Regulations 2026
  Building System Reform Branch
  Department of Transport and Planning
  GPO Box 2392
  Melbourne VIC 3001

All comments and submissions will be considered. Submissions will be treated as public documents unless confidentiality is specifically requested.

You may choose to make an anonymous submission if you do not wish for your name to be published.