If you're planning to build or renovate your home in the coming years, there are some significant changes on the horizon that will affect you. Here's what you need to know.
What's Changing and Why?
The Government has announced it will be changing how responsibility works when building defects occur. Currently, if something goes wrong with your build, councils can be held responsible for the full cost of repairs—even if they only played a small role in approving the work. This means ratepayers can end up footing the bill.
From 2027 onwards, this will change to a "proportionate liability" system, where each party involved in your build is only responsible for their share of any problems. While this creates a fairer system overall, it also means councils won't be the safety net they once were.
So What Does This Mean for You?
The good news is that the Government recognises homeowners need protection. That's why they're introducing three important safeguards to ensure you're not left out of pocket if a builder, designer, or other professional involved in your project can't pay for defects they've caused.
1. Mandatory Home Warranties (Starting 2027)
What it covers: If you're building a new home up to three storeys or doing renovations over $100,000 that require a building consent, you'll automatically be covered by:
- A 1-year defects warranty for general issues
- A 10-year structural warranty for major problems
What it costs: Between $1,500 and $3,000 for a $500,000 build—that's roughly $120 to $275 per year spread over the 10-year coverage period. It's a one-off payment that buys you peace of mind.
Why it matters: Currently, less than half of new builds have this protection. Under the new rules, your home will be covered even if a builder goes out of business or can't be found when problems emerge.
2. Professional Indemnity Insurance for Designers
What it means: Architects, engineers, designers, and building surveyors working on your project will be required to have insurance that covers mistakes in their work.
Why it matters: If there's a design fault that leads to problems with your home, this insurance ensures there's money available to fix it—even if the professional has retired or their business has closed.
Most professionals already have this insurance voluntarily, so this requirement simply closes the gap and protects everyone.
3. Tougher Penalties for Licensed Building Practitioners
What's changing: Licensed builders, carpenters, roofers, and other tradespeople who do substandard work will face:
- Fines up to $20,000 (up from $10,000)
- Suspensions up to 2 years (up from 1 year)
Why it matters: These penalties haven't changed since 2007, and their impact has been weakened by inflation. Stronger consequences mean better accountability and higher standards across the industry.
When Will This Happen?
The Building Amendment Bill is expected to be introduced in early 2026 and passed by mid-2026. After that, there will be a one-year transition period, meaning these protections should be in place by mid to late 2027.
What Should You Do?
If you're planning to build or renovate:
Before mid-2027: Ask your builder about warranty options. While not mandatory yet, many reputable builders already offer guarantees through Master Builders, Certified Builders, or other providers.
After mid-2027: These protections will be automatic for qualifying projects, but it's still worth understanding what's covered and what's not.
Always: Work with licensed professionals. Check that builders are Licensed Building Practitioners and that designers have appropriate qualifications and insurance.
The Bottom Line
These changes are designed to protect you during one of the biggest investments you'll ever make. While councils will no longer be the automatic backstop if things go wrong, mandatory warranties and insurance requirements mean you'll have strong protections in place when you need them most.
Building or renovating a home should be an exciting journey, not a stressful gamble. These new safeguards are about making sure that when you hand over the keys to your dream home, you can do so with confidence.