Victoria’s Building Law Overhaul – What Homeowners Need to Know in 2026

Victoria’s building laws are about to change in ways that matter to every homeowner, property buyer, and apartment purchaser in the state. Two new pieces of legislation passed the Victorian Parliament in 2025 and take effect from 1 July 2026: the Building Legislation Amendment (Buyer Protections) Act 2025 and the Domestic Building Contracts Amendment Act 2025. Here is what you need to know.

A New Regulator Is Taking Over

The Victorian Building Authority (VBA), which has overseen building compliance in Victoria for years, is being replaced by a new body called the Building and Plumbing Commission (BPC). The BPC will take on a broader role, including the power to directly intervene in building disputes and order builders to fix problems.

Home Warranty Insurance Is Changing for the Better

One of the most significant reforms involves home warranty insurance, formally known as Domestic Building Insurance (DBI). Under the old system, homeowners could only make a claim on their insurance policy after first proving that their builder was insolvent, had died, or had disappeared. This made the system difficult to use in practice and left many homeowners without a practical remedy.

From 1 July 2026, Victoria moves to a “first-resort” scheme. This means homeowners can make a claim directly on their insurance policy without having to prove anything about the builder’s circumstances first. If your builder has done defective or incomplete work, you no longer need to wait for them to go broke before you can access the insurance cover you paid for.

Binding Rectification Orders

Under the new laws, the BPC will have the power to issue binding rectification orders. These orders can require a builder to fix defective or incomplete work within 10 years of the occupancy permit being issued. This gives homeowners a practical enforcement tool that does not necessarily require going to VCAT or court.

Stronger Protections for Off-the-Plan and Apartment Buyers

For buyers of residential apartments and off-the-plan properties, developers will be required to hold a bond of 2% of the contract price for a period of 10 years. This provides a financial safety net if defects emerge after settlement. New deposit limits and stronger protections for homeowners signing domestic building contracts are also part of the reform package.

What This Means for You

Whether you are currently dealing with a building dispute, considering signing a new building contract, or buying off the plan, these reforms change the landscape considerably. The key changes — including first-resort insurance, rectification orders and developer bonds — all shift more power to homeowners.

If you are unsure how the new laws apply to your situation, or if you are already dealing with a building defect or dispute, getting legal advice early can make a significant difference to your outcome.

Contact Professional Edge Lawyers on 1800 776 529 to speak with a Victorian building and construction lawyer about how these changes affect your rights.