Do you need a licensed renovator? Contracts and deposits explained
Not every bathroom or kitchen job requires a licensed builder, but a genuine renovation — one involving structural work, plumbing or electrical changes, or spending above a state-set threshold — almost always does. Understanding roughly where that line sits, and what your state requires once you are over it, is worth knowing before you start collecting quotes rather than after work has already begun.
Each state and territory sets its own dollar threshold above which residential building work must be carried out by a licensed contractor. In New South Wales, that threshold commonly sits around $5,000. In Queensland, it is commonly lower, around $3,300. Victoria applies a broadly similar threshold to NSW for domestic building work, commonly around $5,000, while Western Australia's threshold is commonly considerably higher, around $20,000. Below these figures, some minor work can be done without a licence, but anything above them — which describes the large majority of genuine bathroom and kitchen renovations — legally needs a licensed builder or the relevant licensed trade.
Written contracts become mandatory above a further threshold in most states. In New South Wales specifically, the Home Building Act 1989 requires a written contract for any residential building work valued at more than $20,000, covering both labour and materials, and setting out matters like the scope of work, the price, and the expected timeframe. A renovator who is reluctant to put a full-scope, full-price agreement in writing once a job crosses that kind of threshold is a clear warning sign, regardless of how reasonable their verbal quote sounded.
Deposit limits are one of the more commonly misunderstood parts of hiring a renovator, and they vary noticeably between states. In New South Wales, deposits for residential building work are commonly capped at 10 percent of the contract price. Queensland runs a tiered system: for contracts between roughly $3,301 and $20,000, the maximum deposit is commonly 20 percent of the contract price, but for contracts above $20,000 that cap commonly drops to just 5 percent. Victoria applies a broadly similar approach to larger contracts, with deposits commonly capped around 5 percent of the contract price under state domestic building contract law. A renovator asking for a deposit well above these figures — 30, 40 or 50 percent up front — is asking for more than the law in most states actually allows for a contract of that size, and it is a reasonable and fair question to raise before signing anything.
Beyond the contract and deposit itself, structural changes can also trigger a council approval requirement separate from the licensing question. Removing a load-bearing wall, changing a roofline, altering drainage, or building near a boundary commonly requires a Development Application or, in some states such as NSW, a Complying Development Certificate, before work can start — purely cosmetic changes generally do not need this kind of approval, but it is worth confirming with your renovator, and your council if in doubt, whenever a layout change is involved rather than assuming a straightforward refresh.
Put together, a genuinely licensed, above-board renovation involves three checks worth making before you sign anything: confirm the renovator holds the correct state licence for work of that value and type, insist on a written contract once the job is anywhere near the threshold in your state, and check the deposit being asked for is within your state's legal cap rather than assuming a large upfront payment is standard practice. None of these checks take long, and a legitimate renovator will not hesitate to satisfy any of them.
This article is general information about how licensing, contracts and deposits commonly work across Australia, not legal advice for your specific renovation, and requirements can change over time. Checking directly with your state's building or fair trading regulator is worthwhile for anything unusual. Our directory lists Australian bathroom and kitchen renovators by area if you are ready to start comparing.
Frequently asked questions
Almost always, once the job is a genuine renovation rather than very minor work. Each state sets its own dollar threshold above which a licence is required — commonly around $5,000 in NSW and Victoria, around $3,300 in Queensland, and around $20,000 in WA.
In NSW, the Home Building Act 1989 requires a written contract for residential building work valued at more than $20,000. Other states apply broadly similar principles, and a renovator reluctant to put a full-scope agreement in writing above that kind of value is a warning sign.
It depends on the state and contract value. NSW commonly caps deposits at 10 percent of the contract price; Queensland is commonly tiered, up to 20 percent under $20,000 but down to 5 percent above it; Victoria commonly caps deposits around 5 percent for larger contracts.
Purely cosmetic work commonly does not need council approval, but removing a load-bearing wall, changing a roofline, altering drainage or building near a boundary commonly does, typically through a Development Application or, in some states, a Complying Development Certificate.