Builder deposits: New South Wales
The limit here is 10% of the contract price. What is true everywhere — and why the cap is not the protection — is on the main page.
New South Wales sets the most generous deposit cap in the country, and that is not the advantage it sounds like.
Ten per cent, and a trap above it
The cap is a flat 10% of the contract price, and unlike most of the country it does not step down as the job gets bigger. On a $600,000 build that is $60,000 before a trench is dug.
The catch sits in the insurance. A deposit above 10% may not be recoverable under the Home Building Compensation Fund if the builder later fails — so the cap is not only a rule the builder must obey, it is the boundary of what the scheme will protect. Paying over it does not just break the rule. It puts the excess outside the safety net.
The certificate comes before the money
Where the work must be insured, the builder cannot ask for a deposit until cover is taken out and the certificate is in your hands. That ordering is the single most useful thing on this page: if someone asks for a deposit and cannot produce a current certificate, the request itself is out of order, and that is worth knowing before you decide whether it is a paperwork lapse or a warning.
New South Wales: the numbers
- Maximum deposit
- 10% of the contract price
- Does the cap change with contract size?
- No — the same 10% applies to small jobs and large jobs
- Before a deposit can be taken
- Home Building Compensation cover must be in place and the certificate given to you
- Progress payment schedule required
- On every contract over $20,000
Read from NSW Fair Trading, Contracts for residential building work on 13 October 2026. We publish the date we read it so you can see how old this is — these limits change, and NSW Fair Trading is the authority on what applies to your contract.
Questions about New South Wales deposits
Is 10% really the limit in NSW?
Yes, and it applies to both small and large jobs — the cap does not step down as the contract price rises, which is unusual nationally.
What if I pay more than 10%?
The excess may not be recoverable under the Home Building Compensation Fund if the builder later fails. The cap marks the edge of what the scheme protects, not just a rule the builder has to follow.
Can a builder take a deposit before insurance is arranged?
Not where the work must be insured. Cover has to be in place and the certificate given to you first. A deposit request with no current certificate is out of order.