Progress payments are how almost every new home in NSW gets paid for: the price is split into stages, and the homeowner pays as each stage is reached. Clear stages protect both sides. The builder is paid as work is done, and the homeowner only pays for work that has actually happened.
This article is general information about NSW rules as published by the NSW Government, not legal advice. Check your contract and get advice for your situation.
The rules that frame progress payments in NSW
The NSW Government's guidance on contracts for residential building work sets out the basics:
- Written contracts: work over $5,000 (including GST) needs a written contract. Work over $20,000 needs a "large job" contract with more required content, including a progress payment schedule.
- Deposit: the deposit must not exceed 10% of the contract price.
- Insurance first: for residential building work over $20,000 that has to be insured (some work is exempt), the builder must have home building compensation (HBC) insurance in place and give the homeowner a certificate before asking for a deposit or any other payment.
- Payments match work done: progress payments must match the work carried out.
- Cooling-off: contracts over $20,000 have a cooling-off period of five clear business days after the homeowner is given a copy of the contract.
Two ways a payment schedule can work
According to the same guidance, a large job contract's progress payment schedule can use one or a combination of two approaches:
- Fixed payments by stage: a set amount or percentage due when each stage, described in plain language, is complete. This is the usual approach for new homes.
- Payments as work is performed: claims at regular intervals or as invoiced, supported by invoices or receipts. This is more common in cost-plus contracts and renovations.
The usual stages of a new home
Every contract sets its own stages, but most new-home contracts in NSW use some version of these:
- Base: site preparation and the slab or footings are complete.
- Frame: wall frames are up and the roof frame is on.
- Lock-up: external walls, roof covering, windows and external doors are in, so the house can be locked.
- Fixing: internal linings are up and fixtures such as cabinetry, doors and skirting are fitted.
- Practical completion: the home is finished apart from minor defects, and ready to hand over.
The percentage due at each stage varies between contracts, so check yours rather than relying on a "typical" split. What matters most is that each stage is described clearly enough that both sides agree when it's been reached.
For builders: make each claim easy to approve
- Describe stages in plain language in the contract, as NSW rules require, so there's no argument about what "frame" includes.
- Send evidence with each claim: photos of the completed stage and any inspection reports.
- Give notice: tell the homeowner, and their lender if there is one, when the next stage is close.
- Keep variations separate, with each one agreed in writing and signed by both parties, as NSW rules require.
For homeowners: what to check before you pay
- That you've received the HBC insurance certificate before paying a deposit.
- That the stage described in your contract has actually been reached.
- That the amount matches your payment schedule, plus any approved variations.
- That your lender knows the claim is coming, if you're paying through a construction loan.
Keeping everyone on the same page
Most payment disputes start as a misunderstanding about what's been done. When the homeowner can see each claim beside the photos and paperwork for that stage, there's much less to argue about. Portalview's progress payments view is built for exactly that.
Source: NSW Government, Contracts for residential building work, checked 9 October 2026. Stage descriptions are general and vary between contracts.