Buying a home with owner-builder work in Victoria: what changed on 1 July 2026

A lot of Victorian houses have had work done by the owner rather than a registered builder: an extension, a deck, a bathroom rebuild, sometimes the whole house. That is legal, but when an owner-builder sells within a set period after the work, the law requires extra protections for the buyer, and those protections must show up in the Section 32 vendor statement.

The rules changed on 1 July 2026. This guide explains what to look for as a buyer. It is general information, not legal advice, and owner-builder disclosure is an area where you should have a lawyer or conveyancer check the documents.

How to tell if owner-builder work was done

Consumer Affairs Victoria (CAV) suggests three ways to tell if a house was owner-built or had owner-builder work:

• check the name of the builder on the building permit attached to the Section 32
• contact the local council
• contact the Building and Plumbing Commission (BPC), which issues certificates of consent to owner-builders.

In practice, a building permit listing the owner as the builder, or a certificate of consent number, is the clearest sign.

The basic rule: section 137B of the Building Act

Section 137B of the Building Act 1993 (Vic) applies when a person "constructs" a home and sells it within a prescribed period. The Legal Practitioners' Liability Committee (LPLC), Victoria's statutory insurer for lawyers, explains that the period is 6.5 or 7 years from commencement or completion, depending on whether a permit was required and obtained, and that "constructs" is defined broadly. It includes renovating or altering part of a building and may include cosmetic work.

If section 137B applies, the vendor must, before the contract is signed:

• obtain a defects inspection report from a prescribed building practitioner, and
• comply with the insurance requirements, which is the part that changed in 2026.

LPLC notes that the defects report requirement applies whenever the owner-builder carried out work within the broad definition of construct, regardless of value or insurance.

What changed on 1 July 2026

Before 1 July 2026, an owner-builder selling within the period needed domestic building insurance and had to give the buyer a certificate of that insurance. That cover was "last resort": a buyer could claim only if the owner-builder had died, disappeared or become insolvent.

From 1 July 2026, the Building Legislation Amendment (Buyer Protections) Act 2025 replaced that with a statutory insurance scheme run through the BPC. CAV describes the new Home Warranty insurance as stronger protection that allows a claim sooner for incomplete, defective or non-compliant work.

LPLC summarises the main differences for owner-builder sales:

The amendment to section 32B of the Sale of Land Act 1962 now requires the Section 32 to include particulars of any cover under the statutory insurance scheme that applies to the residence.

Important detail for buyers: LPLC points out the new scheme applies to a narrower range of owner-builder work than the old regime. So a house with owner-builder work may correctly have no insurance cover, for example where the work was under $20,000. The defects report is still required.

What to check in the Section 32

When owner-builder work appears, look for:

1. The building permit(s) for the work, and who is named as builder.
2. A certificate of consent if the work was valued over the threshold.
3. A defects inspection report from a prescribed building practitioner. Read it. It often lists defects the vendor has not fixed.
4. The insurance position: - a notice of cover under the statutory insurance scheme, or - a clear statement of why no cover is required, or - for older sales or work, a certificate of the former owner-builder warranty insurance. Which applies depends on dates, and this is a question for your conveyancer.
5. Section 137C warranties in the contract. LPLC notes these statutory warranties run with the building to the purchaser and subsequent owners and need to be included in the contract.

What happens if it is wrong

LPLC states that a Section 32 that gets the owner-builder position wrong lets the purchaser avoid the contract at any time before settlement under section 137B(3), and that the vendor commits an offence. LPLC also says it sees many claims each year where vendors' solicitors got this wrong.

That does not mean you should sign and hope to rely on it later. Ending a contract is a legal step with costs and risk. The better course is to raise gaps before you sign.

Practical questions to send

• "The permit lists the owner as builder. Please provide the certificate of consent, defects inspection report, and the notice of cover or the reason no cover is required."
• "The defects report lists [item]. Has it been rectified? Please provide evidence."
• "Was any other work done in the last seven years that is not on the permit list?"

A note on CAV pages

At the time of writing, CAV's owner-builder checklist page still refers to a $16,000 threshold for a certificate of consent, while CAV's June 2026 news item and LPLC's July 2026 article describe the $20,000 threshold from 1 July 2026. Rely on your conveyancer for which applies to the work in your property.

How ReadyToSign helps

ReadyToSign flags owner-builder indicators in the permits section of your Section 32, checks whether a defects report and insurance particulars are attached, and quotes the page where each was found or notes that it could not be found. It is not legal advice; it gives you a precise list of questions for your conveyancer.

Check your Section 32

Related: Section 32 checklist · Cooling-off periods by state

Frequently asked questions

Do owner-builders have to disclose their work in the Section 32?

If section 137B of the Building Act 1993 applies, the vendor must obtain a defects inspection report and comply with the insurance requirements before sale, and the Section 32 must include the prescribed insurance particulars. Permits for recent work also appear in the statement.

What changed for owner-builder sales on 1 July 2026?

The old last-resort owner-builder warranty insurance was replaced by a first-resort statutory insurance scheme. According to LPLC, cover is triggered for work over $20,000 carried out under a certificate of consent, the document in the Section 32 is a notice of cover, and the cap is $400,000 per dwelling.

Is a defects report still needed if no insurance is required?

Yes. LPLC states that a defects report is required whenever the owner-builder carried out work within the broad meaning of construct, regardless of value or insurance.

Can I get out of the contract if the owner-builder disclosure is wrong?

Section 137B(3) allows a purchaser to avoid the contract before settlement if the requirements are not met. Get legal advice before relying on this.

Who sells the new owner-builder insurance?

LPLC says cover is bought from distributors appointed by the Building and Plumbing Commission, not from the BPC directly, and that the vendor should allow about three weeks.

Sources

• Consumer Affairs Victoria, Research types of property to buy (buying from an owner builder): https://www.consumer.vic.gov.au/housing/buying-and-selling-property/buying-property/research-types-of-property-to-buy
• Consumer Affairs Victoria, New protections for homeowners set to build (23 June 2026): https://www.consumer.vic.gov.au/latest-news/new-protections-for-homeowners-set-to-build
• Consumer Affairs Victoria, Domestic building insurance and insolvency: https://www.consumer.vic.gov.au/housing/building-and-renovating/defects-delays-and-insolvency/insurance-and-insolvency
• Consumer Affairs Victoria, Owner builders checklist: https://www.consumer.vic.gov.au/housing/building-and-renovating/checklists/owner-builders
• Legal Practitioners' Liability Committee, Changes to owner-builder insurance from 1 July 2026: https://lplc.com.au/resources/lplc-article/acting-for-a-vendor-changes-to-owner-builder-insurance-from-1-july-2026
• Building Legislation Amendment (Buyer Protections) Act 2025, s 79 (AustLII): https://www.austlii.edu.au/au/legis/vic/num_act/blapa202517o2025538/s79.html
• Sale of Land Act 1962 (Vic): https://www.legislation.vic.gov.au/in-force/acts/sale-land-act-1962

General information only, not legal advice. Last reviewed 18 October 2026.