{{ propApi.closeIcon }}
Our industry
Our industry $vuetify.icons.faArrowRight
Economic research and forecasting Economics Housing outlook Tailored market research Economic reports and data Inspiring Australia's building professionals HOUSING The only place to get your industry news Media releases Member alerts Submissions See all
Business support
Business support $vuetify.icons.faArrowRight
Become an apprentice host Hire an apprentice Why host a HIA apprentice? Apprentice partner program Builder and manufacturer program Industry insurance Construction legal expenses insurance Construction works insurance Home warranty insurance Tradies and tool insurance Planning and safety services Building and planning services How can HIA Safety help you? Independent site inspections Solutions for your business Contracts Online HIA Tradepass HIA SafeScan HR Docs Trusted legal support Legal advice and guidance Professional services 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 and products Concrete, bricks and 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 Falls from heights Safety rules Working with silica See all Building your business Growing your business Maintaining your business See all Other subjects COVID-19 Getting approval to build Sustainable homes
Careers & learning
Careers & learning $vuetify.icons.faArrowRight
A rewarding career Become an apprentice Apprenticeships on offer Hear what our apprentices say Advice for parents and guardians Study with us Find a course Get your builder's licence Learn with HIA
HIA community
HIA community $vuetify.icons.faArrowRight
Join HIA Sign me up How do I become a member? What's in it for me? Get involved Become an award judge Join a committee Partner with us Get to know us Our members Our people Our partners Mates rates What we do Mental health program Charitable Foundation GreenSmart
Awards & events
Awards & events $vuetify.icons.faArrowRight
Awards Australian Housing Awards Awards program National Conference Industry networking Events Building and Renovation Home Show
HIA products
HIA products $vuetify.icons.faArrowRight
Shop @ HIA Digital Australian Standards Contracts Online Shipping and delivery Purchasing terms & conditions Products Building codes and standards Hard copy contracts Guides and manuals Safety and signage See all
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

Progress payments for residential building work in Victoria

In the residential building industry, the right to claim a progress payment generally arises when the work as defined in the contract, has been completed.

In the residential building industry, the right to claim a progress payment generally arises when the work as defined in the contract, has been completed. 

The Victorian HIA Contracts provide builders with two options for progress payments:

  • Method 1, which are the prescribed progress stages and percentages; or 
  • Method 2, which allows builders to fill in their own customised progress stages and percentages.  

Method 1 – Prescribed progress payment stages

Method 1 uses the prescribed progress stages required by section 40 of the Domestic Building Contracts Act 1995 (the Act).  The stages are described as: 

1. Base Stage

  • in the case of a home with a timber floor, the stage when the concrete footings for the floor are poured and the base brickwork is built to floor level
  • in the case of a home with a timber floor with no base brickwork, the stage when the stumps, piers or columns are completed
  • in the case of a home with a suspended concrete slab floor, the stage when the concrete footings are poured
  • in the case of a home with a concrete floor, the stage when the floor is completed
  • in the case of a home for which the exterior walls and roof are constructed before the floor is constructed, the stage when the concrete footings are poured

2. Frame Stage
When a home’s frame is completed and approved by a building surveyor.

3. Lock-up Stage
When a home’s external wall cladding and roof covering is fixed, the flooring is laid, and external doors and external windows are fixed (even if those doors or windows are only temporary).

4. Fixing Stage
When a home’s internal cladding, architraves, skirting, doors, built in shelves, baths, basins, troughs, sinks, cabinets, and cupboards are fitted and fixed in position.

5. Completion
When the building works under the contract have been completed.

The percentage of the contract price able to be claimed by a builder for each stage of works will depend upon what the builder is being contracted to perform. The below table prescribes the different stages and percentages which may apply under Method 1.

Type of Contract Percentage of Contract Stages Included 
(as described above)
Contract to build to lock-up stage 20%
25%
Base Stage
Frame Stage
Contract to build to fixing stage 12%
18%
40%
Base Stage
Frame Stage
Lock-up stage
Contract to build all stages  10%
15%
35%
25%
Base Stage
Frame Stage
Lock-up Stage
Fixing Stage

Note: The progress stages should add up to 100% once the builder adds:

  • the deposit (5% or 10%); and
  • the final payment.  

Method 2 – Customised progress payment stages

Method 2 allows the builder and the client to agree to different progress payment stages and percentages.  This option offers parties flexibility as progress stages may be customised to suit business and cashflow needs.  The amount claimed in each stage must reflect the value of the works being completed. 

When using Method 2 it is important to be very clear in the description of the works to be completed in each stage. 

If Method 2 is selected, the owner must sign a separate form acknowledging that their legal rights are changing and agreeing to the different progress stages being used. This is included in the HIA Contracts. 

When can you request payment?

A claim for payment can only be made once all the work under a relevant progress payment stage has been completed. 

Limits on Deposits

Section 11 of the Act also sets out limits on the amount of a deposit that can be taken.

The builder cannot take a deposit of more than:

  • 5% for contracts over $20,000; or 
  • 10% for contracts less than $20,000 

These limits cannot be changed, even if you are using Method 2. 

Failure to comply with this requirement may result in the owner being able to terminate the contract and the builder may also face penalties.

To find out more, contact HIA's Workplace Services team

Email us

Share with your network:

More articles on:

{{ tag.label }} {{ tag.label }} $vuetify.icons.faTimes
Find guides, how-tos, resources and 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