Selling a home you built yourself in Victoria: the owner-builder rules

Owner-builders in Victoria get one rule that most other sellers never meet. If you built your home, or extended or altered it, under a certificate of consent and you sell within the warranty period, section 137B of the Building Act 1993 sets conditions you have to meet before you sign a contract.

The rule is not new. What changed on 1 July 2026 is the insurance side of it, when Victoria's new statutory insurance scheme replaced domestic building insurance for new work. If you last looked at this a few years ago, some of what you read no longer applies.

Everything below is taken from version 152 of the Building Act, in force from 16 September 2026.

Does section 137B apply to you?

It applies to a person who "constructs" a building and then contracts to sell it within the prescribed period. "Construct" is wider than it sounds. Section 137B(7) includes building or rebuilding, making alterations, enlarging or extending, and causing someone else to do any of those things or managing or arranging them. An owner-builder who hired trades to do the work, and ran the job, has constructed the building.

Some things are outside it. A home built by a registered builder under a major domestic building contract is not caught, because that work has its own insurance through the builder. Neither is a building VCAT has exempted.

Section 137B(6) says the section applies whether or not the construction is complete when the contract is signed. Selling a half-finished owner-builder project does not avoid it.

How long the rule lasts

The prescribed period for domestic building work is set out in section 137B(7):

The test is whether the buyer becomes entitled to possession within that period. If settlement falls inside it, the section applies even if the contract was signed with a long settlement in mind.

Pull out your occupancy permit or certificate of final inspection before you talk to an agent. The date on it decides everything else.

What you must do before you sign

Section 137B(2) says you must not enter into the contract unless four things are in place.

1. A defects report from a prescribed building practitioner

The report has to come from a prescribed building practitioner and contain the matters the Minister has set by notice in the Government Gazette. It must be obtained not more than 6 months before the contract is signed, and you must give the intending purchaser a copy.

Six months is a real limit. If your campaign drags, or the first contract falls over, the report can expire before the next buyer signs. Order it close to listing, not a year ahead.

2. Compliance with the statutory insurance scheme

The Buyer Protections Act 2025 brought owner-builder work into the new statutory insurance scheme from 1 July 2026. Section 137I(c) applies the scheme to domestic building work carried out under a certificate of consent. Section 137J(d) excludes work costing less than $20,000, and section 137J(c) excludes the construction of residential apartment buildings.

You must have complied with the scheme's requirements, which in practice means the premium has been paid and cover is in place before you sign.

3. A notice of cover, given to the buyer

When the Authority accepts the premium, section 137T requires it to issue a notice of cover. You have to give that notice to the purchaser before the contract is signed.

4. The statutory warranties in the contract

For the sale of a home, the contract must set out the warranties implied by section 137C. You warrant that the work was carried out in a proper and workmanlike manner, that the materials were good and suitable and new unless the contract says otherwise, and that the work complied with the Act, the regulations and all other laws. A later owner of the home can sue on those warranties as if they had signed the contract. A clause that tries to remove them is void, except for a defect the buyer knew about or ought reasonably to have known about when signing.

Why the new insurance scheme matters to buyers, and so to you

Under the old domestic building insurance, a buyer could generally only claim if the builder had died, disappeared or become insolvent. The new scheme is described as first-resort. Section 137K entitles a building owner to assistance where the work is incomplete, defective or non-compliant, without first having to chase the person who did it.

There is a limit for you as the seller. Section 137L(c) says a person who was required to obtain a certificate of consent is not entitled to assistance for that work. The cover protects the people who buy from you, not you.

The Building and Plumbing Commission's Home Warranty page gives the cover periods for eligible work: up to 6 years after completion for major defects, and up to 2 years for other defects or non-compliant work. It also says that existing domestic building insurance policies continue under the old scheme. If you already bought owner-builder insurance under the old system, ask us to check whether it still meets the requirement for your sale.

The Section 32 statement has to match

Your Section 32 vendor statement carries the owner-builder disclosure too. Section 32B of the Sale of Land Act 1962 requires particulars of cover under the statutory insurance scheme where section 137B applies. Section 32E requires details of any building permit issued in the preceding seven years where there is a residence on the land.

A further change is coming. The Building Legislation and Treasury Legislation (Tax Relief) Amendment Act 2026 will require every Section 32 to disclose all statutory insurance scheme cover, including a registered builder's, and whether the land is in a designated flood-prone area. Those changes commence by proclamation, and no later than 1 December 2027.

If you skip a step

Two consequences, and the first is the one that hurts.

The buyer can avoid the contract. Section 137B(3) says a contract signed in breach is not void, but it is voidable at the purchaser's option at any time before completion. A buyer who gets cold feet, finds a cheaper house or cannot get finance has a ready-made exit up to settlement day. If you have committed to your next purchase on the strength of the sale, that is a serious problem.

It is an offence. The maximum penalty is 100 penalty units. At the 2026-27 value of $209.10, that is $20,910.

A selling timeline that works

1. Find your completion date. Occupancy permit or certificate of final inspection. If neither exists, the building permit date.
2. Talk to us before you sign with an agent. We confirm whether section 137B applies and what the Section 32 has to say.
3. Arrange the insurance. Premium paid, cover in place, notice of cover in hand. Allow several weeks; it is the step most likely to hold up a launch.
4. Order the defects report from a prescribed building practitioner close to listing, so it is less than six months old when contracts are signed.
5. We prepare the Section 32 and the contract, with the report and notice of cover attached and the section 137C warranties set out.
6. The agent launches. The buyer receives the report and the notice before signing.

Our selling checklist covers the other certificates a sale needs. We prepare the contract and Section 32 as part of selling your property.

What we do not do

We are conveyancers. We do not inspect buildings, write defects reports or sell insurance. Those come from a prescribed building practitioner and the statutory scheme. If a buyer later claims a defect breaches the section 137C warranties, or a dispute starts over the work itself, that is a matter for a solicitor.

Questions we get asked

I only built a deck and a pergola. Does this apply?

Possibly not to the insurance. The statutory insurance scheme does not apply to domestic building work costing less than $20,000. Section 137B itself is broader, and whether it applies depends on the work, the permits and the dates. Send us the permit documents and we will tell you.

I am the executor of an owner-builder's estate. Does section 137B bind me?

Yes. Section 137B(5AA) extends it to an executor or administrator of the estate of the person who constructed the building, and to a mortgagee in possession. Under section 137B(5AAB), you can rely on steps the owner-builder took in the six months before the contract. Our guide to deceased estate transfers covers the estate side.

The six and a half years run out in two months. Can I just wait?

Often, yes. The test is whether the buyer becomes entitled to possession within the prescribed period. If you can sign after the period ends, or set settlement after it, the section may not apply. Work the dates through with us before you rely on that.

Talk to us early

Owner-builder sales go wrong when the seller finds out about section 137B after the agent has a buyer. Find out before the photographer arrives.

Wise Step Conveyancing is at 105A High Street, Cranbourne, and acts for sellers across Victoria. We are open Monday to Friday, and on weekends by appointment. Ask us for a quote, or get in touch if you want to check whether the rule applies to your home.

This article is general information about Victorian conveyancing and is not legal advice for your particular transaction. Speak to us about your specific circumstances.