Victorian Building Buyer Protections Bill Announced

The Victorian government has introduced new buyer protections legislation (Building Legislation Amendment (Buyer Protections) Bill 2025) (the Bill) for the building sector into parliament this week.

The main changes that the Bill seeks to introduce include:

1. Transfer of the Victorian Managed Insurance Authority's domestic building insurance operations and the operations of the Domestic Building Dispute Resolution Victoria (DBDRV) to the Victorian Building Authority (VBA).
2. Establishment of a monopoly for the provision of domestic building insurance for homes including in buildings up to three storeys by the VBA.
3. Establishment of a statutory insurance scheme for homes including in buildings up to three storeys to be operated by the VBA.
4. Provision of stronger powers for the VBA to order the rectification of defective, non-compliant and incomplete building work before and after the building has been occupied.
5. Establishment of a system of developer bonds for residential apartment buildings above three storeys.

These changes will continue the work that is already underway to consolidate building regulation within Victoria under the Victorian Building Authority. The legislation (if passed) will also provide the Authority with additional enforcement powers, usher in a new developer bond scheme and provide a first resort insurance scheme to enhance consumer protections for new builds.

The new developer bond scheme is currently intended to commence at the end of 2025 and will comprise 2% of the construction cost of a project. The scheme has been flagged as a step towards the medium to long term goal of introducing a decennial liability scheme in line with arrangements that are already in place in NSW and the United Kingdom.

Proposals to introduce a building manual for apartments and to introduce more mandatory inspections during construction (specifically prior to waterproofing and plastering) have also been opened for public consultation.

For further information about the announcement click here and the legislation click here and the Department of Transport and Planning's Building Statement: Strengthening Victoria's Building System click here.

RICS and its members have been working with the Victorian government for some time on building reforms and we note the significance of these changes.

A consultation process will now commence on the proposed changes. If you have any comments or feedback please don't hesitate to let us know.