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ARTICLE · 04 JULY 2025

Victoria's New Developer Bond Scheme: Implications For Developers

K&L Gates
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In a significant move aimed to enhance consumer protections in the housing sector, the Victorian Government has enacted the Building Legislation Amendment (Buyer Protections) Act 2025 (Vic) (Act).

AustraliaReal Estate and Construction
Will Grinter
Will Grinter
Maddy Bassal
Maddy Bassal

Introduction

In a significant move aimed to enhance consumer protections in the housing sector, the Victorian Government has enacted the Building Legislation Amendment (Buyer Protections) Act 2025 (Vic) (Act). A key feature of this legislation is the introduction of a developer bond scheme for certain multi-storey residential developments.

Background

From 1 July 2026, developers of certain residential apartment buildings will be required to pay a financial bond prior to applying for an occupancy permit. This bond, set at 2% of the total build cost, will be held by the Victorian Building Authority (VBA) for a period of two years following the issuance of an occupancy permit. The bond may be in the form of a bank guarantee, surety bond or other prescribed form of security.

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