You've picked your builder, the contract's on the table, and the first invoice is for the deposit. How much should it be? In Queensland, that isn't up to the builder. The law sets a maximum, and on a new home it's lower than many people expect.
Here's what the builder deposit rules in Queensland say, the one exception, how the deposit connects to your home warranty insurance and cooling-off period, and what I'd check before paying anything.
C4 - Asking the Right Questions Checklist
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Last updated 5 Oct 2026 · Revision 1 · Free updates for life
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Form Factor: Fillable, print-ready PDF (A4, 15 pages) plus the C4 Explainer PDF (35 pages)
When to use: Choosing a builder (before you pay a deposit or sign)
102 questions to ask every builder on your shortlist, including a visual check of one of their current sites. Compare like for like and choose your builder with confidence before you pay a deposit.
The legal limit on a builder deposit in Queensland
The QBCC sets out the maximum deposit by contract value:
| Contract value | Maximum deposit |
|---|---|
| $3,300 or less | 20% |
| $3,301 to $19,999 | 10% |
| Over $20,000 | 5% |
A new home is well over $20,000, so for almost every new build the builder deposit in Queensland is capped at 5% of the contract price. On a $600,000 contract, that's $30,000 at most.
The cap applies to domestic building contracts under the QBCC Act. It's not a guideline. A builder who asks for more is asking for more than the law allows.
The one exception
The QBCC allows a deposit of up to 20% in limited circumstances: where substantial customised building work or prefabrication is done away from the site, and that work is more than 50% of the total contract price.
The QBCC gives examples like made-to-measure kitchens, windows, sheds, pergolas and cladding. For a whole house, this generally means a modular or largely factory-built home.
It doesn't apply because a builder "orders the frame early" or "needs to lock in materials". If a builder asks for more than 5% on a standard site-built home, ask which exception they're relying on, in writing.
Why paying more than the limit is risky
If you pay more than the legal maximum and the builder later fails before work starts, you can't get the excess back through the Queensland Home Warranty Scheme. The QBCC is clear on this: any amount over the lawful deposit isn't recoverable under the scheme.
The same goes for payments made ahead of the work or outside the contract terms. The QBCC has warned that paying early or paying more than the contract allows can reduce your protection.
My rule: never pay a builder deposit above the cap, whatever the reason given.
How the deposit links to home warranty insurance
For work over $3,300, the builder must collect the home warranty insurance premium from you and pay it to the QBCC within 10 business days of entering the contract. The premium is part of your contract price.
- After you pay the deposit, ask for proof that your home warranty cover is in place.
- If the builder fails before work starts, the scheme can refund your deposit, provided it was within the legal limit.
- If the builder fails after work starts, the scheme can pay to complete the house, up to your cover limit.
The deposit and your cooling-off period
In Queensland, you can usually withdraw from a domestic building contract within five business days. The clock starts the day after you receive a signed copy of the full contract (including the plans and specification) and, for contracts of $20,000 or more, the QBCC Consumer Building Guide.
If you withdraw, you pay $100 plus any out-of-pocket expenses the builder reasonably incurred.
One catch: you can't use the cooling-off period if you got formal legal advice about the contract before signing, or told the builder you had. Getting the contract reviewed before you sign is still the better path, because you can add your special conditions before you're bound.
After the deposit: progress payments
The deposit rules sit alongside the rules for stage payments:
- Each claim must relate to work on your site.
- The builder can't claim more than 50% of the contract price, including the deposit, until at least 50% of the on-site work is done.
- Watch for front-loading. If the early stages add up to much more than the work done, ask why.
A typical Queensland schedule runs roughly: deposit 5%, base 15%, frame 20%, enclosed 25%, fixing 20% and practical completion 15%. Your contract may differ. My progress claims guide explains how each claim should be checked.
What to check before you pay a builder deposit
Before the money leaves your account:
- The contract is signed by both parties. Don't pay a contract deposit on a quote, a letter of acceptance or a verbal promise.
- The amount is within the cap. 5% or less on a standard new home.
- The builder's licence is current. Check it on the QBCC licence search, along with its record.
- The bank details are right. Payment-redirection scams are real. Confirm account details by phone, using a number you already have, not one from an email.
- You get a receipt and, soon after, proof of home warranty cover.
- You know your cooling-off deadline, if it applies.
Our C4 Asking the Right Questions checklist covers the deposit, payment schedule and licence questions to ask before you sign. It's on the Checklists page. If you're still negotiating terms, Can you negotiate your new home construction contract? is worth a read.
Deposit terms are set by your contract and the law, so check your own contract and get legal advice before you sign or pay.
Other states
The caps differ elsewhere. NSW caps the deposit at 10%. Victoria currently caps it at 5% on contracts of $20,000 or more but is changing its rules, so check Consumer Affairs Victoria for the limit in force when you sign.
The short version
On a standard new home, the builder deposit in Queensland can't be more than 5% of the contract price. The only exception allows up to 20% where more than half the price is customised or prefabricated work done off site. Pay more than the cap and you can't recover the excess through home warranty insurance.
Sign first, pay the right amount, and get proof of cover.
FAQs
Can a builder ask for a deposit before I sign the contract?
Don't pay a contract deposit until the contract is signed by both parties. A preliminary agreement for design or site work is a separate document with its own terms, so read it carefully.
Is the 5% deposit on top of the contract price?
No. The deposit is part of the contract price and comes off what you owe through the build.
What if my builder has already taken more than 5%?
Get legal advice and contact the QBCC. Don't pay further stages ahead of the work while it's sorted out.
Is the home warranty premium paid separately from the deposit?
It's part of your contract price. The builder collects it from you and pays it to the QBCC.
