Hiring a builder in NSW: licences, contracts and deposits

Short answer: In NSW, anyone doing residential building work worth more than $5,000 (labour and materials, including GST) must hold a contractor licence. Jobs between $5,000 and $20,000 need a written small jobs contract. Jobs over $20,000 need a full home building contract and home building compensation (HBC) insurance. In both cases the deposit can’t be more than 10% of the contract price.

1. Check the licence

A contractor licence is needed to carry out, advertise or contract for residential building work valued at more than $5,000. That includes carpentry, decks, extensions and renovations. Specialist work such as electrical and plumbing needs a licence at any value.

Before you sign anything, look up the licence on the NSW Government’s online licence check. Make sure:

• the name matches the person or company on your quote
• the licence is current
• the licence covers the type of work you’re having done

2. Get the right contract

Contract value (incl. GST)	What’s required
$5,000 or less	No written contract required by law, though a written quote is still a good idea
$5,000 to $20,000	A written small jobs contract
Over $20,000	A written home building contract, plus HBC insurance

The builder must give you a copy of the signed contract within five business days. For contracts over $20,000, you have a cooling-off period of five clear business days after you receive your copy.

3. Don’t pay too much up front

The deposit can’t be more than 10% of the contract price. After that, payments should follow the progress of the work set out in the contract, not run ahead of it.

4. Get proof of insurance

For work over $20,000, the builder must have home building compensation insurance and give you evidence of it before starting work or taking any money, including the deposit.

5. Put variations in writing

If you change the design partway through, get the variation and its price in writing and signed before the extra work is done. It avoids surprises on the final invoice.

Our approach

We give written quotes for every job, use the right contract for the job’s value, and keep deposits within the legal limit.

These requirements were checked against NSW Government sources in September 2026. Rules change, so check the current requirements with Building Commission NSW before you sign.