If you've ever done building work on your own home — anything from a full renovation to a garage rebuild — and you're planning to sell, there's a change in the law you need to know about. From 1 July 2026, the rules around owner-builder insurance in Victoria changed significantly, and getting them wrong can let a buyer walk away from your contract at any point before settlement.
This isn't a niche issue. It applies to any property where an owner has personally carried out building work, at any point in its history — not just recent renovations. If that sounds like your property, here's what's changed and what to do about it before you list.
Selling a property with owner-builder work in its history? The rules changed on 1 July — and a defective Section 32 lets the buyer walk away. Get it checked before you list.
Book a Free Consultation →What Is "Owner-Builder" Work?
If a homeowner carries out building work themselves — rather than a licensed builder doing it under a standard contract — Victorian law treats them as an "owner-builder." This isn't limited to major structural work. Renovating or altering part of a building can count, and in some cases cosmetic work can too.
Because an owner-builder isn't a licensed, insured tradesperson, the law has long required extra protection for whoever buys the property afterwards, in case the work turns out to be defective or incomplete. These vendor obligations apply where the owner-builder work was completed within the previous six and a half years — which is why renovations from years ago can still affect a sale today.
What Changed on 1 July 2026
The insurance scheme that protects buyers of owner-built homes has been overhauled. The broad shift is toward a scheme that's easier for a buyer to claim on, but narrower in exactly which projects it applies to. A few of the practical changes:
- Buyers can claim sooner. Previously, a buyer could only claim on the insurance if the owner-builder had died, disappeared, or become insolvent. Now, a buyer (or a later owner) can claim for defective or incomplete work without any of those conditions applying.
- The value threshold has increased. The insurance requirement is triggered once the work is valued above $20,000 (up from $16,000), and — importantly — your own labour counts toward that value, not just materials.
- A "certificate of consent" now matters. The new scheme only applies to work carried out under a certificate of consent from a building surveyor. If that certificate wasn't obtained, the new insurance scheme simply doesn't apply to that work — which has its own consequences, covered below.
- Cover is bought differently. Owner-builders now purchase cover through one of a small number of providers appointed by Victoria's Building and Plumbing Commission, rather than through an insurance agent as before. Expect to allow around three weeks for it to be issued.
- The cover cap has increased from $300,000 to $400,000 per dwelling.
Why This Matters When You Sell
Every property sale in Victoria requires a vendor statement (commonly known as a Section 32) that discloses relevant information to the buyer. Where a property has owner-builder history, that statement needs to correctly deal with the insurance position — and the consequences of getting it wrong are serious:
- The buyer can walk away from the contract at any time before settlement
- Getting it wrong is also an offence on the vendor's part
We're seeing this catch out vendors more often as the property market has softened — usually because nobody realised that renovation work from years ago still needed to be accounted for when the property came to be sold.
What You Need to Work Out Before Listing
If your property has any history of owner-builder work — by you, or by a previous owner — a few questions need answering before it goes to market:
- Was the work above $20,000 in value? Remember, your own labour counts toward this figure, even if materials alone came in under it.
- Was a certificate of consent obtained for that work? This is a separate question from whether a building permit was required — the two aren't the same test.
- If a certificate was obtained, has the required insurance been arranged? This needs to happen before you enter into a contract of sale, and it takes around three weeks to come through.
- If no certificate was obtained, what needs to be disclosed instead? The insurance requirement won't apply, but a building condition report is still required, and the situation may still need to be disclosed as a material fact depending on how it affects the property.
In every case, a building condition report from a qualified building practitioner is required — this doesn't change regardless of value or insurance status.
How Phan Campbell & Associates Can Help
At Phan Campbell & Associates in Footscray, we act for vendors across Melbourne's west and beyond, and we work through owner-builder history as a standard part of preparing a vendor statement. If your property has any DIY building work in its past — recent or otherwise — talk to us before you list, so we can work out exactly what applies and arrange anything that needs organising well ahead of a buyer signing.
Frequently Asked Questions
1. I took out owner-builder insurance before 1 July 2026 — is it still valid?
Yes. A policy issued before 1 July 2026 continues to be honoured under the new scheme. The change in administration is not treated as a breach of contract and cannot be used by a purchaser as a reason to walk away.
2. I did owner-builder work myself, it cost over $20,000, and I never got a certificate of consent. Can I still sell?
Yes, you can still sell. Because no certificate of consent was obtained, the new insurance scheme does not apply to that work, so there is no cover to arrange or disclose. You still need a building condition report from a qualified building practitioner, and the required statutory warranties still need to be included in the contract.
3. My work never needed a building permit. Does that mean I don't need a certificate of consent either?
Not necessarily. Whether a certificate of consent is required depends on the value of the work — anything over $20,000 — not on whether a building permit was needed. These are assessed separately.
4. What happens if I get this wrong when selling my property?
A purchaser can walk away from the contract at any time before settlement if the vendor statement doesn't correctly deal with owner-builder requirements. Getting it wrong is also an offence for the vendor. This is why it needs to be worked through carefully before your property is listed, not after a buyer is already under contract. If you are unsure how the rules apply to your property, book a free consultation with Phan Campbell & Associates before you list.