Builder insolvent? What happens to your deposit

Whether you get your deposit back depends on your state, the warranty scheme that covers your contract, and whether you paid only the lawful amount. In Queensland the QBCC can refund your deposit or the legal maximum, whichever is less, once a non-completion claim is accepted. In NSW, icare’s HBCF is last resort cover. In Victoria, Home Warranty now covers lost deposits for eligible new contracts.

This guide covers the deposit rules and the claim routes in Queensland, New South Wales and Victoria. To see which building and development companies appear in recent ASIC insolvency notices, use our builder and developer insolvency notices tracker. To confirm a specific company’s status, see how to check if a builder is in liquidation.

How much deposit can a builder legally ask for in Queensland?

The QBCC sets the maximum deposit by contract value:

• $3,300 or less: 20%.
• $3,301 to $19,999: 10%.
• More than $20,000: 5%.

A deposit of up to 20% is allowed where substantial customised building work or prefabrication is done off site and makes up more than 50% of the contract price. The QBCC’s examples include made-to-measure cabinetry, windows, sheds, pergolas and cladding.

The limit matters later. If you pay more than the lawful deposit, the QBCC says you cannot recover the excess in a Home Warranty Scheme deposit refund claim. Paying only what the law allows is the simplest protection you have.

Will the Queensland scheme refund my deposit?

The QBCC explains the payout on its home warranty for non-completion claims page:

• If no work had started: a refund of your deposit or the maximum deposit the law allows, whichever is less.
• If work had started: the gap between the money you still hold (or should still hold) under the contract and the QBCC’s cost to complete the work with another licensed contractor.

The payout can be reduced if you paid above the lawful maximum deposit, paid ahead of the contract schedule, or the value of the work exceeds the contract price by more than 30%.

Does a builder’s insolvency alone let me claim in Queensland?

No. The QBCC says eligibility needs a fixed price contract that ended because you validly terminated it for the contractor’s default, the contractor died, or the company no longer exists (for example, it was deregistered). If the contractor is insolvent, the QBCC must also have cancelled their licence. In the QBCC’s words, “insolvency alone is not enough”.

The QBCC’s non-completion page says it was last reviewed in October 2021, so check the current version before you rely on it.

What is the claim deadline in Queensland?

From the QBCC’s time limits for cover and claims:

1. If work has started, the contract must end within 2 years of work starting. If work has not started, it must end within 2 years of the contract date.
2. Lodge the non-completion claim within 3 months after the contract ends.
3. Use the QBCC’s non-completion of building work complaint form.

What is the maximum deposit in NSW?

The NSW Government’s guide to providing home building contracts says a builder “cannot request a deposit of more than 10 percent”, for both small works and large jobs contracts.

A large jobs contract is required for work over $20,000. It must include insurance details and progress payment terms, and it carries a 5 clear business day cooling off period.

Does icare HBCF cover a NSW builder in liquidation?

It may. icare says the Home Building Compensation Fund may help if the builder:

• becomes insolvent, such as bankrupt or in liquidation;
• dies or disappears; or
• has their licence suspended for not complying with an NCAT or court money order.

HBCF is a “last resort”. If the builder is still trading, other options come first. For incomplete or non-started work, icare says you can claim up to 12 months from when work stopped or failed to start.

Cover is capped at $340,000 for policies issued from 1 February 2012, or $300,000 before that. The cap is a total for the property, including claims by previous owners.

What are the deposit limits in Victoria?

Consumer Affairs Victoria sets the maximum deposit at 10% if the contract price is under $20,000, and 5% if it is $20,000 or more.

Two more points from Consumer Affairs Victoria:

• For work over $16,000, do not pay a deposit until you have evidence of the builder’s domestic building insurance and a current certificate of insurance for the project address (paying for building work checklist).
• Do not pay in advance. Home Warranty insurance may not cover work paid for before it is completed.

Does Victoria now cover lost deposits?

Yes, for new contracts. The Victorian Government says Home Warranty commenced on 1 July 2026 for eligible contracts signed on or after that date. Covered issues include lost deposits, incomplete work and non-compliant or defective work.

The bigger change is timing. Under the old domestic building insurance model, a claim generally waited until the builder became insolvent, disappeared or died. Under Home Warranty, claims can be made when an issue is first identified. Domestic building insurance policies issued before 1 July 2026 stay with the original insurer and do not transfer. For more on the three schemes, see our guide to home warranty insurance in Queensland, NSW and Victoria.

What should I do first?

1. Confirm the company’s status from the record, not from rumour. Start with ASIC’s published notices and our ASIC notices tracker.
2. Find your contract, deposit receipt and the insurance certificate or policy details for your property.
3. Check the deadline for your state above, and lodge with the right body: the QBCC in Queensland, icare in NSW, or the Victorian scheme that covers your contract date.
4. Keep paying nothing ahead of the contract schedule while the position is unclear.

Primary sources

• QBCC: Deposits and progress payments
• QBCC: Home warranty for non-completion claims
• QBCC: Time limits for cover and claims
• NSW Government: Guide to providing home building contracts
• icare: What is icare HBCF
• icare: HBCF, what am I covered for
• Consumer Affairs Victoria: Deposits and payments
• Consumer Affairs Victoria: Paying for building work checklist
• Victorian Government: Home Warranty insurance

General information only, not legal or financial advice. Check the primary sources above or get professional advice for your situation.