{{ propApi.closeIcon }}
Our industry
Our industry $vuetify.icons.faArrowRight
Housing industry insights Economics Insights Data & forecasts Tailored research and analysis Advocacy & policy Advocacy Policy priorities Position statements Submissions News and inspiration Industry news Member alerts Media releases HOUSING Online
Business support
Business support $vuetify.icons.faArrowRight
Become an apprentice host Hire an apprentice Why host a HIA apprentice? Apprentice partner program Builder & manufacturer program Industry insurance HIA Insurance Services Construction works insurance Home warranty insurance Tradies & tool insurance Member perks Toyota vehicles The Good Guys Commercial Fuel savings See all Planning & safety solutions Building & planning services Safe Work Method Statements (SWMS) Solutions for your business Contracts Online Advertise jobs Trusted support & guidance Contracts & compliance support Industrial relations
Resources & advice
Resources & advice $vuetify.icons.faArrowRight
Building it right Building codes Australian standards Getting it right on site See all Building materials & products Concrete, bricks & walls Getting products approved Use the right products for the job See all Managing your business Dealing with contracts Handling disputes Managing your employees See all Managing your safety Safety rules Working with silica See all Building your business Growing your business Maintaining your business See all Other subjects Getting approval to build Sustainable homes See all
Careers & learning
Careers & learning $vuetify.icons.faArrowRight
A rewarding career Become an apprentice Apprenticeships on offer How do I apply? Frequently asked questions Study with us Find a course to suit you Qualification courses Learning on demand Professional development courses A job in the industry Get your builder's licence Continuing Professional Development (CPD) Further your career Find jobs
HIA community
HIA community $vuetify.icons.faArrowRight
Join HIA Sign me up How do I become a member? What's in it for me? Mates rates Get involved Become an award judge Join a committee Partner with us Our initiatives HIA Building Women GreenSmart Kitchen, bathroom and design hub Get to know us Our members Our people Our partners Support for you Charitable Foundation Mental health program
Awards & events
Awards & events $vuetify.icons.faArrowRight
Awards Awards program People & Business Awards GreenSmart Australian Housing Awards Awards winners Regional Award winners Australian Housing Award winners 2024 Australian Home of the Year Enter online Industry events Events in the next month Economic outlook National Conference Events calendar
HIA shop
HIA shop $vuetify.icons.faArrowRight
Most popular products National Construction Code Vol 1 & 2 Waterproofing wet areas AS 3740:2021 HIA Guide to Waterproofing HIA Guide to NCC Livable Housing Provisions Top categories Building codes & standards Contracts & documents Guides & manuals Safety products Signage For your business Contracts Online Digital Australian Standards Digital Resource Library Forecasts & data
About Contact Newsroom
$vuetify.icons.faTimes
$vuetify.icons.faMapMarker Set my location Use the field below to update your location
Address
Change location
{{propApi.title}}
{{propApi.text}} {{region}} Change location
{{propApi.title}}
{{propApi.successMessage}} {{region}} Change location

$vuetify.icons.faPhone1300 650 620

Cost Plus Contract FAQs

Frequently asked questions about Cost Plus Contracts in the ACT.

For a more detailed guide and further information, please see our information sheet Guidelines when using HIA Cost Plus contracts.

A Cost Plus contract is used when a fixed price for the works cannot be given at the time of entering into the contract. For example, if you are completing a renovation, it may not be possible to provided a fixed quote until you commence the works due to the cost of materials and labour or any other additional works that may be required.

Cost Plus Contract questions

Is it a "do and charge" contract?
{{ propApi.expandedIcon }} {{ propApi.collapsedIcon }}

No. 

The only element that is not agreed or fixed at the time of signing in the price. This means that you must have a clear scope of works and plans and specifications that sets out the building works to be carried out. If changes are made along the way, you must follow the variation process set out in the contract.

Do I need to provide the owner with an estimate?
{{ propApi.expandedIcon }} {{ propApi.collapsedIcon }}

That is up to you.

Whilst the contract does not require the builder to provide an estimate, an owner may still insist that the builder provide an estimate so that the owner has an idea of how much the project will cost.

Even if you do choose to provide an estimate, the HIA Cost Plus contract contains a warning to the homeowner that the contract price is not known and any estimate provided is an estimate only and not a representation of the contract price. 

To avoid any disputes with homeowners, builders should:

  • Keep a record of all quotes and calculations. 
  • Clearly and carefully define the scope of works.
  • Provide estimates based on the latest known material and labour costs.
  • Provide allowances for cost increases.
  • Provide a price range, e.g. $250,000 to $285,000.
  • Err on the side of caution and overestimate your fee estimates.
How do I determine the cost of the works?
{{ propApi.expandedIcon }} {{ propApi.collapsedIcon }}

The contract sets out that the price of the building works is an amount equal to:

(a) the cost of the building works; plus
(b) the builder’s fee; plus
(c) any GST payable in connection with the above amounts.

The cost of the building works includes those costs directly related to the work, including but not limited to:

  • the cost of all subcontracts
  • the labour costs of the builder and its employees
  • fees for services such as surveyors, engineers, architects and consultants
  • premiums for insurances referred to in the contract
  • the costs associated with any equipment, plant and materials
  • and any other costs as outlined in Schedule 2 of the contract.

The cost of the building works excludes any GST paid by the builder in respect of a taxable supply in which input tax credits are available to the builder. This is because you do not want to charge GST on a GST-inclusive amount. GST will be recoverable by the builder in accordance with clause 10 of the contract.

What is the builder's fee?
{{ propApi.expandedIcon }} {{ propApi.collapsedIcon }}

The builder’s fee is money that the builder charges the owner on top of the cost of the building works to cover indirect costs, overheads and profit.

The contract gives you the option to either make the builder’s fee a set amount for the whole job or you can charge a percentage of the cost of the building works. If you do not specify a percentage, the default percentage amount is 20%.

Your own time on the job is a direct cost and should be charged as a cost of the works, not as part of the builder’s fee.

When and how do I get paid?
{{ propApi.expandedIcon }} {{ propApi.collapsedIcon }}

The HIA Cost Plus contract provides the option of either creating your own progress stages or a time period for reaching progress stages, being:

(a) For the first progress stage - the Friday after the first full 2-week period after commencement of the works; and
(b) For all other stages - every second Friday after the previous stage.

Each progress claim needs to be accompanied by evidence of costs incurred up to the time of making a claim (such as invoices, receipts from suppliers and contractors and other documents that support or justify the amount being claimed).

To find out more, contact HIA InfoCentre

Email us

Share with your network:
More articles on:
{{ tag.label }} {{ tag.label }} $vuetify.icons.faTimes
Find the latest expert advice, guides and much more!

Managing your business


 

Can’t find what you need, check out other resources that might be closer to the mark.

Explore resources

Contracts Online 


 

The industry’s go-to digital platform. 

No matter the size of the job, a watertight building contract is critical to protect your business, and the current climate presents a great opportunity to go digital with your contracts.

Take me there

ACT Kitchen Bathroom and Laundry Supply Install (Duplicate)

This Supply and Install Contract is tailored specifically to the kitchen, bathroom and laundry industry. The contract allows for all job details to be formalised and provides an estimate of pricing for provisional sum items. The c...

ACT Minor Works Contract (Pad of 25)

The ACT Minor Works Contract is suitable for minor projects up to a value of $12,000 (such as a patio or shed installation). It’s available in a handy tear-off pad of 25. This is a hard copy document and will be mailed to you once...

ACT New Dwellings Contract (Pack of 2)

Building professionals should use the ACT New Dwellings Contract (pack of two) when working on a new dwelling. The contract allows for all job details to be formalised and provides schedules for progress payments, excluded items, ...

ACT Alterations & Additions Contract (Pack of 2)

This contract (pack of two) is suitable for residential building work relating to an alteration, addition, renovation or where the work is not to completion stage. The contract allows for project details to be formalised and also ...