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

Updated September 2026: the reforms described below commenced on 1 July 2026, except the developer bond, which applies to apartment buildings with a building permit issued from 1 July 2027.

Victoria’s building laws have changed 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: the Building Legislation Amendment (Buyer Protections) Act 2025 and the Domestic Building Contracts Amendment Act 2025. The main homeowner protections in the Buyer Protections Act took effect on 1 July 2026. Here is what you need to know.

A New Regulator Has Taken Over

On 1 July 2025, the Victorian Building Authority (VBA) was replaced by a new body, the Building and Plumbing Commission (BPC). The BPC brought together the VBA, Domestic Building Dispute Resolution Victoria and the domestic building insurance business of the Victorian Managed Insurance Authority. Since 1 July 2026 it has had a broader role, including the power to order builders to fix defective work.

Home Warranty Insurance Has Changed for the Better

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

For contracts entered into from 1 July 2026, Victoria has a “first-resort” Home Warranty scheme for eligible work on homes of up to three storeys valued at more than $20,000. You may be able to claim if work is incomplete, defective or non-compliant and the builder is unable or unwilling to complete or fix it, even if the builder is still trading. In that case you must first give the builder a complaint notice and allow time for a response. The maximum assistance is $400,000 per home.

Binding Rectification Orders

Since 1 July 2026, the BPC has had the power to issue binding rectification orders under section 75B of the Building Act 1993 (Vic). These orders can require the builder or, for an apartment building, the developer to fix defective, incomplete or non-compliant work, generally within 10 years of the occupancy permit or certificate of final inspection (or practical completion where neither was issued). VCAT can extend that period. 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 apartment buildings of four storeys or more with a building permit issued from 1 July 2027, developers must lodge a bond with the BPC equal to 2% of the build cost before applying for an occupancy permit. The bond gives a source of funds to fix defects found in the first two years. The Domestic Building Contracts Amendment Act 2025 makes further changes for homeowners signing domestic building contracts, including to deposits and raising the threshold for a major domestic building contract from $10,000 to $20,000. Those changes start on a date to be proclaimed, and no later than 1 December 2026.

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.