Deposit Limits for Residential Building Contracts in SA

What it is

South Australia caps the deposit on a domestic building work contract with a structure no other state copies: a flat dollar figure first, then a percentage once the contract is big enough.

The two limbs

The cap sits in the definition of prescribed payment in section 30(4)(d) of the Building Work Contractors Act 1995 (SA). For a contract made on or after 1 September 2011:

• if the price stipulated in the contract for the performance of the building work is less than $20,000, a deposit of not more than $1,000;
• if the price stipulated is $20,000 or more, a deposit of not more than 5 per cent of the price.

Read those boundaries exactly as drafted. The dividing line is less than $20,000 against $20,000 or more. It is not $20,000 or less against over $20,000, which is how the rule is usually paraphrased. At exactly $20,000 the second limb applies and 5 per cent produces $1,000, so the limbs meet without a gap or an overlap.

Where the cap moved on 15 January 2026

Until 15 January 2026 the deposit sat in regulation 17 of the Building Work Contractors Regulations 2011, reached through section 30(1)(b) of the Act. Act 68 of 2025, the Statutes Amendment (Building and Construction Industry Review - Penalties) Act 2025, deleted section 30(1)(b), lifted the authorised payment list up into the Act as the new prescribed payment definition in section 30(4) and created a fresh offence in section 30(2a).

Regulation 17 still sits in the Regulations pointing at a paragraph that no longer exists. Anyone drafting from the Regulations alone is reading a spent provision. The operative source is the Act.

Advance payments for third party costs

The deposit is not the only lawful up-front payment in SA, and this allowance is specific to the state. The prescribed payment definition also covers a payment to a third party for engineering, drawing, surveying or other professional services. It covers a payment to reimburse the cost of building indemnity insurance or any fee required to be paid under an Act in respect of the work.

Consumer and Business Services puts it plainly in the prescribed Form 1 notice: apart from money in advance for such fees, the law prohibits taking a deposit above the cap. The state government says the same thing from the builder's side, that a builder can also ask to be paid for things like council approval and soil testing.

These sit alongside the deposit rather than inside it. A builder can take a 5 per cent deposit and separately recover an engineer's fee without breaching the cap.

What it costs to get wrong

Section 30(2a) makes it an offence to demand or require a payment under a domestic building work contract or preliminary work contract unless the payment is a prescribed payment. The maximum penalty is $100,000 for a natural person and $500,000 for a body corporate, with an expiation fee of $5,000.

Section 30(2b) shifts the practical burden. If it is proved that the defendant received a payment that was not a prescribed payment, the defendant is presumed to have demanded or required it unless the contrary is proved.

Section 30(1) runs alongside, requiring a payment to be a genuine progress payment for work already performed or an entitlement under the Building and Construction Industry Security of Payment Act 2009, on the same maximum penalties. Section 30(3) adds that the owner is not obliged to make a progress payment without a written request. Section 42 makes void any term purporting to exclude the Act, so a contract cannot bargain around the cap.

How SA compares

NSW runs a single flat rate. Section 8 of the Home Building Act 1989 (NSW) caps the deposit at 10 per cent of the contract price, with no threshold and no dollar floor.

WA also runs a single rate, lower. Section 10(1)(a)(i) of the Home Building Contracts Act 1991 (WA) caps the deposit at 6.5 per cent of the total amount payable, and that cap only operates on contracts between $7,500 and $500,000.

Both apply one number to any contract value in range. South Australia is the outlier. Below $20,000 the SA cap ignores the contract price entirely, so a $9,000 job and a $19,000 job carry the same $1,000 ceiling where NSW would allow $900 and $1,900. Above the threshold SA's 5 per cent is the lowest of the three: on a $400,000 home the ceiling is $20,000 in SA, $26,000 in WA and $40,000 in NSW.

A builder porting a contract into South Australia has to change two things. The rate, and the shape.