Deposit Limits on ACT Residential Building Contracts

What it is

A deposit is the money an ACT owner hands a builder before work starts. The Building Act 2004 (ACT) defines it in exactly those terms, at section 93 (4): an amount paid or payable by the owner to the builder, under the contract to carry out the work, before the beginning of the work.

What the Act does not do is cap it. Read the whole Building Act 2004 and the word deposit appears in one section only, section 93, and that section is about what an insurer pays out when a builder goes under. There is no percentage limit, no dollar ceiling and no offence for asking too much. The ACT stands alone in Australia on this.

The ACT has no statutory deposit cap

Every other state fixes a number in its home building statute. The ACT fixes none. Part 6 of the Building Act 2004 carries the statutory warranties, the standard conditions power, residential building insurance and the fidelity fund scheme, and it says nothing at all about how much a builder may take up front.

Division 6.2A does give the Territory the power to fix one. Section 89C (1) lets a regulation prescribe a standard condition for a residential building work contract, and section 89C (2) makes it a strict liability offence to enter a contract that leaves a prescribed condition out, with a maximum penalty of 10 penalty units. A deposit cap could be prescribed that way tomorrow. The Building (General) Regulation 2008 (ACT) has not prescribed a single standard condition, so the power sits unused and the contract stays the only place an ACT deposit is limited.

The $10,000 that actually matters

The real constraint is not a cap, it is cover. Under section 93 (3), if a builder becomes insolvent and the work done is worth less than the deposit paid, the owner recovers from the insurer the lesser of two amounts: the deposit less the cost of any work done, or a prescribed amount less the cost of any work done. Section 43 of the Building (General) Regulation 2008 sets that prescribed amount at $10,000.

That figure did not move on 1 January 2025, when the ACT lifted minimum cover from $85,000 to $200,000 and the claim window from 90 days to 180 days. Section 39 of the Building (General) Regulation 2008 sets that cover at $200,000, and has done since 1 January 2025.

ACT Government guidance has not caught up. The Territory's building contracts page still tells owners the most they can claim is $10,000 for a deposit and $85,000 for completed work. The $85,000 is the superseded figure. Work from the regulation rather than the page, and treat the page's number as out of date rather than as a second opinion.

So a $60,000 deposit on a $600,000 build is not a 10 per cent deposit with insurance behind it. It is $10,000 insured and $50,000 unsecured. If the builder fails before turning a sod, the owner wears the gap.

What actually constrains an ACT deposit

Four things, and not one of them is a cap.

• The contract. Whatever the parties write is the limit. Industry standard-form contracts carry their own deposit clauses, and those clauses are negotiable.
• The insurance ceiling. $10,000 is the point past which a deposit stops being protected at all.
• Unfair contract terms. The Australian Consumer Law regime applies to standard-form consumer contracts and reaches a deposit clause that is heavily one-sided.
• Licensing conduct. Taking money and failing to perform is a matter for the Construction Occupations Registrar under the Construction Occupations (Licensing) Act 2004 (ACT), administered through Access Canberra.

How the ACT compares

Jurisdiction	Deposit cap
ACT	None
NSW	10 per cent, flat
VIC	5 per cent at $20,000 or more; 10 per cent under
QLD	10 per cent level 1; 5 per cent level 2
WA	6.5 per cent
SA	$1,000 if the price is under $20,000; 5 per cent at $20,000 or more

An owner arriving from Sydney assumes 10 per cent is the ceiling. In Canberra 10 per cent is not a ceiling. It is just a number someone typed into a contract, and nothing in the Building Act 2004 stops it reading 30 per cent instead.

What to do about it

Keep the deposit at or below $10,000 and the whole of it sits behind the insurance. Above that line every extra dollar is an unsecured bet on the builder's balance sheet. The absence of a rule is not permission to write a big number. It is the reason to argue about it before signing.