2025 brought important legislative shifts across Australia’s east coast construction industry in Queensland, New South Wales, and Victoria. From trust account requirements and contract timeframes to procurement policies, these changes aim to improve fairness and efficiency.
Further developments are set for 2026, so principals and contractors should stay alert. Below is a state-by-state summary of the key 2025 updates and what to expect in 2026.
Queensland
Project Trust Accounts – Rollout Paused
In 2025, the Queensland government paused the further rollout of its project trust account regime pending a review by the State’s Productivity Commission. Plans to extend trust account requirements to more projects are on hold, so existing trust account rules remain in place for now. Industry participants should watch for the Government’s response to the review’s findings in 2026 for an indication as to what the future for the trust account scheme may look like.
Limitation Period for Deeds Halved
Effective August 2025, Queensland’s amended Property Law Act 2023 (Qld) reduced the limitation period for legal actions on deeds from 12 years to 6 years. This aligns the timeframe for enforcing deed obligations with the 6-year limit on contract claims. In practical terms, using a deed no longer extends liability beyond what an ordinary contract provides, removing a long-standing incentive to prefer deeds over standard contracts.
QBCC Act Amendments
Several changes to the Queensland Building and Construction Commission Act 1991 (Qld) were passed in 2025 (awaiting commencement). These include removing the need to report serious safety incidents twice (to both QBCC and Workplace Health & Safety) – one notification will suffice – and eliminating the requirement for physical QBCC licence cards. Expected to take effect in 2026, these changes will streamline compliance. Contractors should be ready to follow the updated reporting process and maintain digital licence records once the new provisions kick in.
Procurement Policy Changes
Queensland updated its government procurement policy for 2026, notably removing mandated “Best Practice Industry Conditions” (BPIC) from tender requirements. The new policy (effective 1 January 2026) instead emphasises local participation, simpler and more transparent procurement, innovation, sustainable practices, and supplier diversity. Contractors bidding for government projects should align with these priorities, highlighting local job creation, innovative solutions, and the like, to stay competitive under the revamped rules.
Productivity Commission Review
In mid-2025, the Queensland Productivity Commission’s interim report on construction recommended further reforms. Notably, it suggested keeping the trust account expansion on hold until proven beneficial, scrapping minimum financial requirements for contractor licensing unless clearly justified, and re-examining certain licensing rules (e.g. labour hire) to ease skill shortages. The government’s response in 2026 could bring significant changes. Principals and contractors should stay tuned, as any adopted reforms may affect licensing and financial compliance for doing business in Queensland.
New South Wales
New South Wales’ construction laws remained mostly steady in 2025, with one significant reform delayed to the coming year.
Design and Building Practitioners Act Expansion Delayed
The Design and Building Practitioners Act 2020 (NSW) (DBP Act) – which currently applies mainly to class 2 residential buildings (multi-unit dwellings) – was slated to expand in 2025 to cover work on existing class 3 (hotels, boarding houses) and class 9c (aged care) buildings. That expansion has been postponed to 1 July 2026. From that date, those projects will be subject to the DBP Act’s stricter design and certification requirements. Builders and consultants in these sectors should use the lead-up time to ensure the necessary practitioners are accredited and to become familiar with the compliance documentation and processes the law will demand. Aside from this adjustment in timing, NSW did not enact major new construction legislation in 2025, giving the industry a chance to continue adapting to earlier building reforms.
Victoria
Victoria introduced major construction law reforms in 2025, setting the stage for significant changes to payment processes in 2026.
Security of Payment Overhaul
The Victorian Parliament passed sweeping amendments to the Building and Construction Industry Security of Payment Act 2002 (Vic), expected to commence in 2026 (exact start date to be confirmed). These reforms align Victoria’s payment laws more closely with those in Queensland and New South Wales, and strengthen contractors’ rights to prompt payment. Key changes include:
- 20 Business Day Payment Terms: A statutory maximum payment term of 20 business days for progress payments, tightening payment timeframes.
- Christmas Shutdown Excluded: The definition of “business day” will exclude the industry shutdown period (22 December–10 January), pausing payment claim deadlines over the holidays.
- December Claim Date Rule: Any work performed after 22 December each year can only be claimed on or after 31 January, effectively pushing end-of-year claims into the new year.
- Right to Release of Retentions: Contractors gain a right to have performance security (e.g. retention monies or bank guarantees) released once due, ensuring timely return of held funds.
- Notice Before Calling Security: Parties holding security must give 5 business days’ notice before drawing on a performance security, creating a short window for the other party to respond or remedy the issue.
- Unfair Time Bars Voidable: Adjudicators will be empowered to declare contractual notice requirements void if meeting them was not reasonably possible or would be unreasonably onerous, preventing unfair denial of claims on technical grounds.
Are you Ready?
These upcoming changes mean everyone in the contracting chain should be ready to adjust in Victoria. Before the new law kicks in, review your contracts and practices: ensure payment terms comply with the 20-day limit, modify any clauses that conflict with the new timelines (especially around the Christmas period), plan for the notice requirement on security, and recognise that harsh notice-based time bars will soon carry no weight. Embracing these changes will keep you compliant and ultimately foster fairer, more predictable payment processes on Victorian projects.
Keeping up-to-date with these legislative shifts is crucial. By understanding the new rules and preparing for those on the horizon, principals and contractors can navigate 2026 with confidence and stay ahead in a rapidly evolving regulatory landscape.
Unsure how these changes impact you? Our construction team can help you understand what these reforms mean for your contracts and projects.
