Progress Payments Explained: How You Actually Pay for a QLD Build

On a Queensland residential build you pay in instalments as the work goes up, not in one lump at the end. A deposit when you sign, a series of progress payments as agreed stages are actually finished on site, then the final payment at practical completion. Schedule 1B of the Queensland Building and Construction Commission Act 1991 caps the deposit and sets a test every progress claim must pass, but it deliberately does not fix how many progress payments there are or what percentage sits against each stage. Those come from your contract. Knowing which is which is how you avoid paying ahead of the work.

What a progress payment is under Queensland law

Domestic building work priced over $3,300 including labour, materials and GST must be under a written contract, and the QBCC splits those contracts into two levels: level 1 for work priced $3,301 to $19,999, and level 2 for work priced at $20,000 or more. Almost every new home, extension or serious renovation on the Sunshine Coast is a level 2 contract, which also means your builder must give you the QBCC consumer building guide before you sign.

From there, the payment structure lives in your contract schedule. The QBCC guide for owners and contractors is blunt about it: under Schedule 1B, contractors and homeowners “are now free to determine how many progress payments, if any, are appropriate for their particular project and when they are payable”. There is no legislated stage-percentage table in Queensland. What is legislated is the deposit cap, and the proportionality test applied to every claim after it.

QBCC stage payments and statutory deposit caps

The stage names below are the ones used in standard residential contract schedules. The caps in the right-hand column are statutory. The percentages against the construction stages are not — they are negotiated in your contract, and they are what you should read closely before signing.

How much deposit can a Queensland builder legally ask for?

Section 33 of Schedule 1B is the provision homeowners most often misread. For a level 2 contract — anything at $20,000 or more, which covers essentially every job quoted from our Coolum Beach office — the QBCC states the maximum deposit is 5% of the total contract price. The 10% figure people repeat applies only to level 1 contracts between $3,301 and $19,999.

There is one exception. Section 33 also allows a maximum deposit of 20% where, irrespective of the contract price, the value of off-site work is more than 50% of the contract price. QBCC guidance is clear this is intended for limited circumstances where substantial customised building work or prefabrication is performed away from the site — its own examples are kitchen modules, customised windows, sheds, pergolas or cladding made to measure off-site. It is not a general licence to ask for a bigger deposit on a conventional build.

Your Queensland Home Warranty Scheme premium is commonly wrapped into that deposit. Under the QBCC Act your builder must collect the premium from you and pay it to the QBCC within 10 business days after the date the contract was entered into, or before the contracted work is started, whichever is earlier. The QBCC then sends a notice of cover setting out the work, the contractor and the premium paid, and its guide says that notice should arrive before work begins. If it has not landed by the time an excavator turns up on your Noosa or Sunshine Coast block, chase it.

What has to be true before a builder can claim a progress payment

Section 34(1) of Schedule 1B puts two conditions on every claim after the deposit. The amount must be directly related to the progress of the contracted work at the building site, and it must be proportionate to — or less than — the value of the work covered by the claim. The QBCC spells this out with a worked example: a contractor “can’t claim a total of 50% of the contract price, including the deposit, until the total value of the work performed on site has reached at least 50% of the contract price”.

Two consequences follow. A progress claim cannot include costs incurred before work commenced on site, and it cannot include work not yet performed. Builders can no longer contract out of that proportionality obligation, so a clause in someone’s own contract saying otherwise does not rescue the claim.

The date work actually started matters, because it is the gate every progress claim has to pass through. On level 2 contracts, section 16 of Schedule 1B requires your builder to give you a commencement notice within 10 business days of the contracted work starting on site, stating the exact date work commenced and the date for practical completion. Keep it. It is the document you check a disputed claim against.

The QBCC also warns homeowners never to pay more than the amount required under the contract for a progress payment, and never to make a payment before it is due, because doing so may reduce the protection available to you under the Queensland Home Warranty Scheme. Paying early to be helpful is not a neutral act. If scope changes mid-build, that belongs in a compliant variation document, which the QBCC requires be presented to you in writing and agreed in writing by you before the variation work starts — see building contract variations in QLD. The QBCC is equally clear that a contractor cannot require payment for a variation before the variation work is started.

What practical completion actually means

Practical completion is defined in section 1 of Schedule 1B as the day the work is completed in compliance with the contract, including all plans and specifications and all statutory requirements applying to the work, and without defects or omissions other than minor ones that will not unreasonably affect occupation. If you do claim minor defects or omissions, the builder must give you a defects document. The QBCC sets out what it has to contain: every minor defect and omission you both agree exists, when the builder is to remedy them, any you believe exist that the builder does not agree with, and the signatures of both parties.

Walk the job slowly before you sign it. On a coastal job at Yaroomba or Marcus Beach that walk covers every external seal, flashing and item of hardware, not just paint finish. The QBCC’s advice is that if you believe the work is not complete when the builder requests the practical completion payment, you should tell your contractor in writing and check your contract obligations — the final payment is not due until practical completion has been reached. Some contracts, including those produced by the QBCC, also require all relevant certificates of inspection to be copied to you before the contractor demands the final payment.

What happens to your money after handover

Queensland’s statutory rules on retention amounts and securities sit in the commercial contracts part of the QBCC Act, not in Schedule 1B, so on a home build they are not what protects you after handover. Your defects liability period is. The QBCC’s guide for owners and contractors notes that most domestic building contracts commonly used in Queensland — including those produced by the QBCC, HIA and Master Builders Queensland — include a defects liability period, and that it is commonly 12 months from the date of practical completion. It is a contractual period, so read yours rather than assuming.

That period is the window in which your builder is contractually obliged to rectify defects you have identified and referred to them in writing. QBCC recommends you check the work carefully and notify the contractor in writing of any defects well before the period expires, and suggests diarising a reminder a month or so before it runs out. That is sound advice — put it in the calendar the week you move in. More in defects liability and warranty in QLD.

How we structure progress claims

Roebuck Concepts settles the payment stages with you at the contract step, before a trade is booked — see our build process and new home builds pages. If you are weighing a fixed price against cost-plus, read fixed price building contracts in QLD first: the QBCC warns that the use of a cost plus or construction management form of contract will lead to the loss of non-completion cover under the Queensland Home Warranty Scheme.