On 3 June 2025, the Victorian Government passed the Building Legislation Amendment (Buyer Protections) Act 2025 (VIC) (“the Act”), which is due to commence by 1 July 2026 or an earlier date to be proclaimed.[1]
The Act increases the domestic building regulatory functions of the Victorian Building Authority (“VBA”), so that it can become a “one-stop-shop” building regulator with an increased ability to resolve building disputes.[2]
In order to achieve this, the Act introduces a number of amendments to existing legislation. One key amendment is the introduction of a developer bond scheme in relation to residential apartment buildings with more than 3 storeys[3]. This amendment brings Victoria into alignment with New South Wales, which operates a similar scheme.
The developer bond scheme will require developers to a lodge a financial bond with the Victorian Building Authority (VBA) for residential apartment buildings over three storeys before being able to apply for an occupancy permit[4]. Non-compliance will attract significant penalties of up to 500 penalty units for individuals and 2,500 penalty units for corporations, equating to fines in excess of $500,000 under the current penalty unit rate.[5]
Under the existing New South Wales bond scheme, a developer of a strata scheme[6] must provide a building bond in the amount of 2% of the contract price for the building works[7]. This amount will be increased to 3% from 1 July 2026.[8] Similarly to the Victorian scheme, the building bond must be provided before an application can be made for an occupation certificate. [9] This building bond scheme is intended to ensure that there is funding for the costs of rectifying defective building work.[10]
Other amendments to the existing Building Act 1993 (VIC) include:
- providing for a statutory insurance scheme in relation to domestic building work;[11]
- requiring all insurance required under the Building Act 1993 (VIC) to be obtained solely from the VBA;[12] and
- enhancing the VBA’s enforcement powers, including allowing the VBA to issue orders for the rectification of incomplete, non‑compliant and defective building works.[13]
For guidance on the new developer bond schemes in Victoria, contact a member of Addisons’ Construction & Infrastructure team.
1 Building Legislation Amendment (Buyer Protections) Act 2025 (VIC) s 2.
2 Victoria, Hansard Debates, Legislative Assembly, 5 March 2025 (Nick Staikos MP).
3 Building Legislation Amendment (Buyer Protections) Act 2025 (VIC) s 1(a)(iii).
4 Ibid s 1 (a)(iv).
5 Ibid s 96.
6 Strata Schemes Management Act 2015 (NSW) s 207.
7 Strata Schemes Management Regulation 2016 (NSW) reg 54.
8 Ibid.
9 Strata Schemes Management Act 2015 (NSW) s 207.
10 Ibid.
11 Building Legislation Amendment (Buyer Protections) Act 2025 (VIC) s 1(a)(i).
12 Ibid s 1(a)(ii).
13 Ibid s 1(a)(v).