How much deposit can a builder ask for?

There is a legal limit in every state and territory except one, and it is not the same number anywhere. Below is what each sets, and the thing almost nobody is told: the amount you can be asked for and the amount you could get back are two different figures.

The limit, by state

Victoria: 5% if the contract price is $20,000 or more; 10% if it is under $20,000
NSW: 10% of the contract price
Queensland: 5% if the contract price is $20,000 or more; 10% between $3,301 and $19,999; 20% at $3,300 or less
WA: 6.5% of the contract price, for contracts between $7,500 and $500,000
South Australia: not verified — see the page
Tasmania: 5% if the contract price is $20,000 or more; 10% below that; 20% where more than half the work is performed off-site
ACT: no statutory limit
NT: 5% of the total contracted price

Each figure was read from that jurisdiction's own government source or Act on 13 October 2026, and the page for each state names the source and links to it. These change — Victoria's are moving by 1 December 2026 — so check the state page and then the regulator before you pay anything.

The cap is not the protection

The deposit cap is a rule about what a builder may ask for. It is not a promise that you will get the money back. Those are governed by different instruments, and the second number is consistently the smaller one.

In Western Australia home indemnity insurance returns a lost deposit only up to $20,000, while a lawful 6.5% deposit at the top of the Act's range is $32,500. In the ACT the cover returns $10,000 and there is no cap on the ask at all. In New South Wales and Queensland, a deposit above the lawful limit is not recoverable under the statutory scheme — so overpaying forfeits the protection as well as the cash.

The useful question is therefore not "is this deposit legal". It is "how much of this would come back if this company stopped trading next month". Those have different answers, and only one of them is about you.

The order to do things in

01
Check the licence before the money
Confirm the licence is current and held by the legal entity named on the contract — not the trading name on the truck. How to check a builder's licence sets out where, by state.
02
See the insurance certificate
In several states a deposit cannot lawfully be taken until statutory cover is in place and the certificate is given to you. If one cannot be produced, the request is out of order before the amount is even discussed.
03
Work out the cap for your contract price
Most jurisdictions step the cap with the size of the job, so the answer depends on your number, not on the suburb or the builder.
04
Ask what the deposit funds
A deposit covering materials already ordered is a different proposition from one funding overheads. The answer is also a fair test of how the company runs.
05
Read the whole schedule, not just the deposit
Front-loading hides in the stages after the deposit. Money paid ahead of built work is the money you cannot recover, so compare the shape of the schedule against the work it claims to follow.
06
Keep the receipts and the dates
If anything goes wrong later, what you paid and when is the first thing every regulator, insurer and administrator will ask for.

If you are asked for more than the cap

In most jurisdictions an over-limit deposit is an offence by the builder, not by you — but that does not get your money back, and in New South Wales and Queensland the excess falls outside the statutory scheme. Say no, in writing, and ask for the request to be put in writing too.

A builder who asks for a deposit well above the statutory limit is telling you something about their cash position. That is worth taking seriously on its own, separately from the legality: it is the same signal that precedes the situation described in what to do if your builder goes into liquidation.