In NSW, deposits for residential building work are capped at 10 percent of the contract price. General building work over $5,000 needs a licence, and work over $20,000 needs insurance cover before any money is paid.
Rules verified against the legislation and NSW Fair Trading on 2026-07-17.
Pick your state and a rough job value. The requirements that apply at that value appear below, with the official source behind each one. Your final signed contract price decides, not the estimate.
Choose a state and a value to see the requirements that apply at that size of job.
For residential building work in NSW, a deposit cannot exceed 10 percent of the contract price, at any contract value.
Home Building Act 1989 (NSW), section 8 (opens in new tab) · NSW Government: contracts for residential building work (opens in new tab)
General residential building work worth more than $5,000 in labour and materials (including GST) needs a contractor licence. Specialist work (electrical, plumbing, gasfitting, air conditioning) needs a licence at any value.
Home Building Act 1989 (NSW), section 4 (licensing) (opens in new tab) · NSW Government: who needs a building or trade licence (opens in new tab)
Work over $5,000 (including GST) needs a written contract: a small jobs contract above $5,000 up to $20,000, and a fuller large job contract over $20,000.
Home Building Act 1989 (NSW), Part 2 (contracts) (opens in new tab) · NSW Government: contracts for residential building work (opens in new tab)
Work over $20,000 needs Home Building Compensation cover, and it is illegal for the contractor to ask for a deposit or any other payment until the cover exists and you have been given the certificate.
Home Building Act 1989 (NSW), section 92 (opens in new tab) · NSW Government: contracts for residential building work (opens in new tab)
Check a NSW licence (Service NSW) (opens in new tab) is the official, free register run by NSW Fair Trading. Then see the public evidence we hold: check the business by name or see the NSW Fair Trading public register entries we have found, and browse tradespeople with public evidence.
For residential building work in NSW, a deposit cannot exceed 10 percent of the contract price, at any contract value. The cap binds on the final signed contract price.
General residential building work worth more than $5,000 in labour and materials (including GST) needs a contractor licence. Specialist work (electrical, plumbing, gasfitting, air conditioning) needs a licence at any value.
Work over $20,000 needs Home Building Compensation cover, and it is illegal for the contractor to ask for a deposit or any other payment until the cover exists and you have been given the certificate.
Use the free official register: Check a NSW licence (Service NSW). It is run by NSW Fair Trading and takes minutes. Checking before you sign costs nothing; skipping it is how most bad hires start.
This is guidance from the public rules, not legal advice. The thresholds bind on your final signed contract price, not an estimate, and state law changes. Check the regulator's current page before you sign or pay anything.
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