If you contract directly with homeowners for residential building work, home warranty insurance is one of the rules you can't afford to miss. In most states you must arrange it before you start work, and often before you take a deposit, once the job is over a set value. Get it wrong and you can face penalties, and the homeowner can lose protection they were entitled to.
Several states changed their rules in 2025 and 2026. Victoria replaced its domestic building insurance with a new Home Warranty scheme from 1 July 2026, and SA and the NT raised their thresholds. This guide sets out the current position in each state and territory, with links to the official pages, as at November 2026.
What home warranty insurance is
Home warranty insurance goes by different names around the country: home building compensation cover in NSW, home indemnity insurance in WA, building indemnity insurance in SA and a fidelity fund certificate in the NT. Whatever it's called, it protects the homeowner, not the builder. It's a last-resort safety net if the builder can't finish the job or fix defects, typically because the builder has died, disappeared or become insolvent.
WA's Building and Energy, for example, says home indemnity insurance can cover the loss of a deposit (up to $40,000) and incomplete or defective building work (up to $200,000). Victoria's new scheme may provide up to $400,000 in total assistance per home, subject to eligibility, limits and exclusions. Cover amounts and what triggers a claim differ between schemes.
Although it protects the homeowner, the builder or contractor is the one who must arrange it, and usually pays for it, building the cost into the price. It's not the same as your public liability insurance, which covers your liability to others. See our guide to insurance for tradies.
The thresholds in each state
Each state sets the contract value above which cover is required. Queensland's is by far the lowest, at $3,300. Most other states now sit at $20,000.
Home warranty insurance: contract value above which cover is required
Queensland requires cover on residential work over $3,300. NSW, Victoria, WA and SA now sit at $20,000, and the NT at $25,000.
Show the figures as a table
| State and scheme | Threshold |
|---|---|
| QLD: home warranty insurance (QBCC) | Over $3,300 |
| NSW: Home Building Compensation (icare) | Over $20,000 |
| VIC: Home Warranty (from 1 July 2026) | Over $20,000 |
| WA: home indemnity insurance | Over $20,000 |
| SA: building indemnity insurance (from 10 Nov 2025) | $20,000 or more |
| NT: fidelity fund certificate (from 30 Mar 2026) | Over $25,000 |
State by state
New South Wales: Home Building Compensation cover
icare says HBCF cover is required for most residential building projects over $20,000 including GST, unless the project is exempt. You'll usually need it if:
- the work is residential building work in NSW,
- the contract price, or the market cost of labour and materials, is over $20,000 including GST, and
- you contract directly with a homeowner, developer or owner-builder, not as a subcontractor.
You must give the homeowner evidence of cover before work begins or money changes hands. icare suggests checking whenever the contract value is close to $20,000, or the scope or value changes.
Victoria: the new Home Warranty scheme
From 1 July 2026, Victoria's Home Warranty scheme, run by the Building and Plumbing Commission, replaced Domestic Building Insurance for new eligible domestic building work. It applies to eligible projects valued at more than $20,000. Under the old scheme the threshold was $16,000, so some smaller jobs no longer need cover.
The scheme may apply to repairs, alterations and extensions, new homes, residential buildings of up to three storeys with more than two homes, and domestic work related to swimming pools. Existing Domestic Building Insurance policies continue under their current terms.
One important point for homeowners and builders alike: the Building and Plumbing Commission says Home Warranty doesn't protect homeowners who use an unregistered builder for work that must be done by a registered builder.
Queensland: the lowest threshold
The QBCC requires contractors to take out home warranty insurance on the owner's behalf for all insurable residential construction work valued at more than $3,300. That value includes the cost of materials (even if you didn't supply them), labour and GST. It applies to building and renovating homes.
Timing is strict. You must pay the premium before work starts or within 10 business days of signing the contract, whichever comes first. The QBCC suggests including the premium in the deposit, which must stay within the maximum the law allows.
Western Australia: home indemnity insurance
In WA, home indemnity insurance is required for all building work that needs a building permit and is valued at more than $20,000. The builder must give the homeowner a copy of the certificate, and Building and Energy tells homeowners not to make any payments until the insurance is in place.
South Australia: building indemnity insurance
SAFA says builders doing work that needs development approval and is worth $20,000 or more must take out building indemnity insurance on the homeowner's behalf for every such contract. Before 10 November 2025, the threshold was $12,000. Cover must be in place before any work begins, including site preparation, demolition and trenching. The penalties for not taking out the insurance are a $20,000 expiation fee or up to $500,000.
Northern Territory: fidelity fund certificate
From 30 March 2026, the value of prescribed residential building work that needs a fidelity fund certificate rose from $12,000 to $25,000. The NT Government's table says you need one for work such as a new house, duplexes and townhouses, converting a shed to a house, and works over $25,000 that increase the floor area of a house or of flats under three storeys. Garden sheds and fences don't need one. A bathroom renovation doesn't either, unless it's done with other work that does.
Australian Capital Territory
The ACT requires residential building work insurance for building work on houses and apartment buildings of three storeys and below (not including a car park). The builder must get it before applying to the certifier for a building commencement notice and starting work, and must give the owner evidence of the insurance. The certifier checks cover is in place before issuing the commencement notice. From 1 January 2025, the minimum insurance amount rose from $85,000 to $200,000, and the time limit to lodge a claim rose from 90 days to 180 days.
Tasmania
The Tasmanian Government says a home warranty insurance model is currently being developed. In the meantime, Consumer Affairs Tasmania runs an interim financial assistance package for consumers whose builder has died, disappeared or become insolvent, intended to provide similar coverage to the future scheme. Check with Consumer Affairs Tasmania for any new requirements before you quote residential work.
Home warranty insurance at a glance
The name, trigger and timing for each scheme.
| State | Scheme | When it's needed | Source |
|---|---|---|---|
| NSW | Home Building Compensation (HBC) cover, through icare | Most residential building work over $20,000 (incl. GST), when you contract directly with the owner, developer or owner-builder. Give evidence of cover before work begins or money changes hands | icare NSW, Do I need HBCF? |
| VIC | Home Warranty, run by the Building and Plumbing Commission | Eligible new domestic building work over $20,000 from 1 July 2026, replacing domestic building insurance for new work. Up to $400,000 in total assistance per home | Building and Plumbing Commission (Vic), Home Warranty |
| QLD | Home warranty insurance, through the QBCC | Insurable residential construction work over $3,300 (including materials, labour and GST). Pay the premium before work starts or within 10 business days of signing, whichever is earlier | QBCC, Who pays home warranty and when |
| WA | Home indemnity insurance | Building work needing a permit and valued at more than $20,000. Can cover a lost deposit (up to $40,000) and incomplete or defective work (up to $200,000) | WA Government (Building and Energy), Building or renovating your home |
| SA | Building indemnity insurance | Building work of $20,000 or more needing development approval. Take it out before any work begins, including site preparation and demolition | SAFA, Building indemnity insurance for builders and brokers |
| NT | Fidelity fund certificate | Prescribed residential building work over $25,000, such as a new home or an extension that adds floor area | NT Government, Fidelity fund certificate |
| ACT | Residential building work insurance | Required for some residential building work. The minimum insurance amount is $200,000 from 1 January 2025 | ACT Government, Residential building work insurance |
| TAS | No home warranty scheme yet | A scheme is being developed. An interim financial assistance package helps some consumers affected by builder failures | Consumer Affairs Tasmania, Financial assistance package |
Practical tips for builders and trades
- Set it up early. Find out how cover is arranged in your state and what the scheme or insurer needs from you, before you start quoting jobs over the threshold.
- Price it in. Include the premium in your quote, and in your deposit where the rules allow, so the cost doesn't come out of your margin.
- Don't start or take money first. In NSW, WA, SA, Queensland and the ACT, the official guidance ties cover to before work starts or before payment.
- Watch variations. A job that starts under the threshold can go over it with variations. Check again whenever the scope or value changes.
- Give the homeowner the certificate, and keep a copy with the contract.
- Make sure you're licensed or registered for the work. Home warranty doesn't fix an unlicensed job. In Victoria, it doesn't protect homeowners who use an unregistered builder for work that needs registration. See trade licence requirements by state.
- Use the right contract. The thresholds for written contracts are often similar to the home warranty ones. Our guide on how to quote a job includes the contract thresholds for four states.
Keep the paperwork together
Home warranty is one more document that has to match the contract, the quote and the variations. Tradie Business keeps each customer's quotes, accepted versions with signatures, invoices and job costs together, so you can see when a job's value is creeping towards a threshold. See the features, the pricing, and how it works for builders, carpenters and tilers.
Home warranty checklist
- Know your state's threshold and exactly how it's measured (GST, materials, permit or approval).
- Find out how to arrange cover in your state before you need it.
- Arrange cover before work starts, and before any payment where required.
- Give the homeowner the certificate.
- Re-check when variations push the value up.
- Keep the certificate with the contract and job records.
