Guide

Progress payments: what you pay and when

The principle is simple and worth holding on to: you should never be significantly ahead of the builder. Money paid for work not yet done is money you may not get back.

Last updated 13 September 2026 · Written by the Better Builds team

Residential building contracts are paid in instalments tied to construction stages rather than in one payment at the end. Your lender, if you have one, pays most of them directly on the strength of an inspection or the builder invoice.

The usual stages

Names vary between contracts and states, but the shape is consistent: a deposit, then base or slab, then frame, then lock-up or enclosed, then fixing, then practical completion. Each stage is meant to represent work genuinely completed.

The principle that protects you

Each payment should correspond to work already in place. If a builder becomes insolvent, the money you have paid ahead of the work is an unsecured debt, and the next builder will price the remaining work at today's rates rather than the ones in your contract. This is the single largest source of loss when a builder collapses mid-build. See what to do if your builder goes under.

What to check before each payment

Has the stage actually been reached? Not nearly. Walk the site, or have your lender inspection or an independent inspector confirm it.

Does the claim match the contract schedule? The stages and amounts should be the ones in your contract, not a revised set.

Are the variations in the right place? Variations should be invoiced as agreed, not absorbed into a stage claim you cannot unpick.

Deposits

Most states cap the deposit a builder may take on a residential contract, and the cap differs by state and sometimes by contract value. Check the current cap with your state regulator before you pay — the figure and the conditions change, and we will not quote a number we have not read on the regulator's own material. The registers are listed in how to check a builder's licence.

If you are asked to pay early

Requests to pay ahead of the stage, or to pay for materials not yet delivered to site, deserve a direct question about why. There are legitimate answers. There are also less legitimate ones, and a builder under cash pressure is the situation you most want to know about early.