Builder asking for a 50% deposit? What the law says and what to do

The limit in your state

Every number below comes from a government page that we link at the bottom.

• VictoriaUp to 10% under $20,000 and up to 5% from $20,000.
• New South Wales10% of the contract price, according to the NSW Government contracts page.
• Queensland20% up to $3,300, 10% from $3,301 to $19,999 and 5% from $20,000.
• Western Australia6.5% for fixed price contracts between $7,500 and $500,000.
• South AustraliaNo more than 5% for domestic building contracts of $20,000 or more.
• Tasmania5% at $20,000 or more.
• Northern TerritoryNo more than 5% of the contracted price.
• ACTNo legal limit on the initial deposit. About 10% is usual.

Why a big deposit puts you at risk

If the tradie never turns up, the money you paid may be hard to get back. Insurance schemes usually cover only part of a lost deposit. In the ACT, for example, warranty insurance covers up to $10,000 of a deposit.

The more you pay up front, the less reason the tradie has to finish on your timeline.

What to say

Keep it calm and put it in writing. Something like this works:

• "Thanks for the quote. Can you send a payment schedule that matches the deposit limit in our state?"
• "I am happy to pay the legal deposit, then pay by stage as each part is finished."
• "Can you add your licence number and insurance details to the quote?"

A fairer way to pay

Pay a small deposit inside the limit, then agree stages tied to finished work: for example materials delivered, work half done, work finished and checked. Keep the last payment until you are happy with the result.

If they will not budge

Walk away. A tradie who needs half the money before starting is often cash strapped or cutting corners. Get at least two more written quotes, check each licence on your state register and use our deposit checker to see what is allowed.