INSIGHT · LICENSING & COMPLIANCE

Victoria's builder capacity limit moved
from the insurer's letter to the registration.

19 October 2026

From 1 July 2026, a Victorian domestic builder's Maximum Construction Capacity (MCC), set by the Building and Plumbing Commission (BPC) under the Minimum Financial Requirements (MFR) and Administrative Guidelines 2026, is the maximum total value of domestic building work it can have at any point in time. It replaced the Total Construction Limit in a Domestic Building Insurance Letter of Eligibility: a Letter current as at 1 July 2026 carries that limit across until the BPC reviews the builder's financial position and sets an adjusted net tangible assets (ANTA) Threshold and MCC, or enters into an MFR Agreement.

Timber roof trusses on a new building frame above a concrete slab

Analysed 19 October 2026 · Minimum Financial Requirements and Administrative Guidelines 2026, Victoria Government Gazette No. S 365, 30 June 2026 · Building Act 1993 (Vic), Authorised Version 152 as at 16 September 2026 · BPC pages on Minimum Financial Requirements (page metadata 18 August 2026) and the Guidelines (version published 23 June 2026) · all read 19 October 2026, the BPC pages and the Gazette PDF through a rendering proxy because the site blocks automated access.

Key takeaways

A cap on work in progress, set by the regulator: The Guidelines define MCC as "the maximum Total Value of Domestic Building Work the Builder can have at any point in time". The BPC states compliance with it "is a condition of registration".
It replaced the insurer's limit on 1 July 2026: Before 1 July 2026, the limit was the Total Construction Limit in a Letter of Eligibility from a designated insurer under the Domestic Building Insurance scheme. A Letter current as at 1 July 2026 carries that limit across as the builder's MCC until the BPC reviews the builder's financial position and sets an ANTA Threshold and MCC, or enters into an MFR Agreement.
What counts is open contracts and live speculative work: The total is the contract price of every insurable domestic building contract not yet at its Completion Date or terminated, plus the market value of speculative work where Home Warranty cover has commenced and the work is not complete.
A check before signing, and accounts every quarter: The BPC states a builder must apply for more capacity before entering a contract that would cause, or is likely to cause, it to exceed its limit. With an MCC of $2 million or more, quarterly Internal Management Accounts are due within 30 days of each quarter end.
We would keep a dated running total: A system-design recommendation: the MCC with its source and date, a work-in-progress total recomputed whenever a contract is signed, varied, completed or terminated, and the quarterly accounts calendar.

The instrument, its term,
and what it replaced.

Section 316A of the Building Act 1993 requires the Victorian Building Authority, trading as the BPC, to determine minimum financial requirements for registration "for the period starting on 1 July 2026 and ending on 30 June 2028", including "the maximum amount of building work or value of domestic building contracts a building practitioner may carry out or enter into". The section was inserted by the Building Legislation Amendment (Buyer Protections) Act 2025, and the Act's endnotes record it commencing on 1 July 2026.

The BPC published the requirements and guidelines in Victoria Government Gazette No. S 365 on 30 June 2026, dated 29 June 2026. That notice withdraws an earlier version published in Gazette No. G 26 on 25 June 2026. Clause 2.1 states the Minimum Financial Requirements and Guidelines commence on 1 July 2026 and remain in force until 30 June 2028.

The previous measure was the Letter of Eligibility, which the Guidelines define as a letter from a designated insurer under section 137AA of the Act stating that a builder is eligible to purchase domestic building insurance policies. Its Total Construction Limit was "the value of domestic building work permitted to be performed by a Builder". The BPC states the MCC "replaces the previous total construction limit used under Domestic Building Insurance".

Section 316A(7) of the Act states a builder holding proof of eligibility given by a designated insurer before the commencement is taken to have met the minimum financial requirements until the eligibility expires or the Authority determines that the builder meets them.

How the cap is set

The Guidelines set the MCC from the builder's Adjusted Net Tangible Assets (ANTA), with one formula up to $20 million and another above it.

At an MCC of exactly $20 million both threshold formulas give $1 million (0.05 x $20 million, and 0.03 x $20 million + $400,000; our calculation). The Guidelines list what counts as Assets (including cash, amounts payable for work performed, plant, real property and an approved Guarantee) and what is disallowed (including intangible assets, shares in unlisted companies and units in unlisted trusts). We do not calculate any builder's ANTA or capacity.

Item	As the Guidelines state it	Clause
MCC up to and including $20 million	MCC = ANTA / 0.05	8.1
MCC above $20 million	MCC = (ANTA - $400,000) / 0.03	8.2
Letter of Eligibility current as at 1 July 2026	MCC equals the Total Construction Limit in that Letter until the BPC reviews the builder's financial position and sets an ANTA Threshold and MCC, or enters into an MFR Agreement	8.3
ANTA	Assets - Liabilities - Disallowed Assets	9.1
ANTA Threshold	0.05 x MCC; where MCC is more than $20 million, 0.03 x MCC + $400,000	14.1, 14.2

What counts against the cap

Clause 15.1 defines the Total Value of Domestic Building Work, the number that must stay at or below the MCC at all times.

Every open insurable contract, at its contract price: The Contract Price, as defined in the Domestic Building Contracts Act 1995, under every Insurable Domestic Building Contract the builder has entered into, except a contract whose Completion Date has occurred or which has been terminated. The definition of Insurable Domestic Building Contract in the Guidelines includes a contract for work outside Victoria that would otherwise meet it.
Live speculative work, at market value: An amount equal to the market value of all Speculative Domestic Building Work carried out in Victoria where cover has commenced under Home Warranty, excluding work whose Completion Date has occurred.
Completion Date is a defined event, not handover by default: The date of issue of the occupancy permit; if none, the date of the certificate of final inspection; if neither is issued or required, the earliest ascertainable of handover of possession, valid termination, or the builder's last attendance on site to carry out work.
The BPC can ask for the figure at a date: Clause 15.2: the BPC may request information to determine the total as at a specified point in time, and the builder must provide it within 14 days of the request.

The obligations that run with it

Clause 7.1 sets the Minimum Financial Requirements for a registered domestic builder. Several are clocks rather than thresholds.

Clause 22 states a failure to meet the requirements is a ground for disciplinary action under s 179(1)(ea) and immediate suspension under s 180(da) of the Act, and that the BPC must immediately suspend registration if it reasonably believes a builder has ceased to meet them. The BPC's page words the accountant line as financial information that must be prepared or reviewed by an independent qualified accountant if the MCC "exceeds $2 million"; clause 16.1(h)(iii) of the Guidelines uses "$2 million or more" for verification. We report both.

At all times: The total value of domestic building work must not exceed the MCC, and ANTA must not be less than the ANTA Threshold supporting it (cl 7.1(a), (b)).
Before signing: The BPC states a builder must apply to it before entering into a contract that would cause, or is likely to cause, the builder to exceed its approved limit.
Each quarter: Where the MCC is $2 million or more, Internal Management Accounts for each quarter, completed within 30 days of the end of the quarter (cl 7.1(c)). They comprise a profit and loss statement, a balance sheet, an aged debtors and creditors report unless waived, and a statement of cash flows.
Within seven days: Written notice to the BPC within seven days of becoming aware the builder is likely to fail to comply with any requirement, or of a failure, with details of how and why (cl 7.1(g)).
Within 14 days of a request: Information the BPC reasonably requires to verify ANTA and the total value of work, and the Internal Management Accounts verified by a Qualified Accountant (cl 7.1(h)).

Groups, trusts and guarantees
are written into the instrument.

The Guidelines address structures that a builder operating through more than one entity would recognise.

A body corporate in an Extended Closed Group, a group bound by a deed of cross guarantee lodged with ASIC, must elect when it applies whether to meet the requirements alone or as the group, and the election must apply consistently to all requirements (cl 18). A trustee prepares the financial information for the trust as well; a partnership for the partnership (cl 16.2).

A loan to a related entity counts as an asset only where that entity holds ANTA, excluding any guarantee, of at least $0 (cl 10.1(i)). A guarantee accepted by the BPC must not end earlier than 10 years after it is given unless the BPC approves a shorter period, and comes with an accountant's statement of the guarantor's financial position and a solicitor's certificate of independent legal advice (cl 12.1).

The BPC's page adds that builders operating through trusts, corporate groups or related entity structures "should seek professional advice regarding how assets may be recognised for ANTA purposes".

What we would put in a system

Where agents help here is narrow. A finance agent can read signed contracts, variations, occupancy permits and certificates of final inspection, keep the open-contract list current, draft the running total and flag a proposed contract that would take it past the recorded MCC, and a person confirms each figure. No agent calculates a builder's ANTA for the BPC, decides whether a builder meets the requirements, or decides whether to sign a contract. Those are matters for the BPC, the builder's accountant and its directors.

Field	Why it is load-bearing
MCC, its source and its date	A transitioned Total Construction Limit and a BPC-set MCC are different records; clause 8.3 ends the first when the BPC reviews the builder's financial position and sets an MCC or enters into an MFR Agreement.
Each open contract's contract price, contract date and Completion Date event	The running total counts every insurable contract until its defined Completion Date, including contracts outside Victoria that would otherwise qualify.
Speculative work with Home Warranty cover commenced, and its market value	It counts at market value, not contract price, until completion.
Headroom check before each new contract, with who reviewed it	The BPC states an increase must be sought before entering a contract likely to exceed the limit.
Quarterly accounts and notices, with due and done dates	30 days after each quarter end for an MCC of $2 million or more; seven days for notice of a likely or actual failure; 14 days for a BPC request.

Questions worth asking
of your own records

For a Victorian domestic builder: can you show your total value of domestic building work as at any date the BPC names?

Clause 15.2 lets the BPC request it as at a specified point in time, with 14 days to respond. That needs each contract's price and its Completion Date event on file, not only a list of active jobs. General information as read on 19 October 2026, not legal or financial advice.

For an estimator or sales manager: is there a step before signing that compares the new contract price with remaining headroom?

The BPC states an increase must be sought before entering a contract that would cause, or is likely to cause, the limit to be exceeded. A check recorded at signing shows when it was done and by whom. General information as read on 19 October 2026, not legal or financial advice.

For a building group: which entity holds each registration, and has each made its Extended Closed Group election?

Clause 18 requires a group entity to elect, when it applies, whether to meet the requirements alone or as the Extended Closed Group, and to apply that election to all requirements. General information as read on 19 October 2026, not legal or financial advice.

For a builder whose MCC came from a Letter of Eligibility: do your records say so?

Clause 8.3 sets that MCC equal to the Letter's Total Construction Limit only until the BPC reviews the builder's financial position and sets an ANTA Threshold and MCC, or enters into an MFR Agreement. The source of the figure, and the date of any review, are the fields that show which applies. General information as read on 19 October 2026, not legal or financial advice.

Questions people ask
about Maximum Construction Capacity

What is Maximum Construction Capacity in Victoria?

The Minimum Financial Requirements and Administrative Guidelines 2026, published in Victoria Government Gazette No. S 365 on 30 June 2026, define Maximum Construction Capacity as the maximum total value of domestic building work a domestic builder can have at any point in time, set by the Building and Plumbing Commission. It applies from 1 July 2026. General information, not legal or financial advice.

Did Victoria's DBI eligibility become Maximum Construction Capacity?

The BPC states the Minimum Financial Requirements replace the Domestic Building Insurance eligibility assessment from 1 July 2026, and that MCC replaces the previous total construction limit. Under clause 8.3 of the Guidelines, a Letter of Eligibility current as at 1 July 2026 carries its Total Construction Limit across as the MCC until the BPC reviews the builder's financial position and sets an ANTA Threshold and MCC, or enters into an MFR Agreement. As read on 19 October 2026; general information, not legal or financial advice.

Does an existing Victorian builder need to reapply for Maximum Construction Capacity?

The BPC states a registered domestic builder with an active Letter of Eligibility on 30 June 2026 transitions without needing to reapply on 1 July 2026, and is not automatically reassessed on that date. The BPC may reassess if the builder seeks an increase, exceeds its capacity or is asked for updated information. As read on 19 October 2026; general information, not legal or financial advice.

Is work in progress counted toward Maximum Construction Capacity?

Yes. Clause 15.1 counts the contract price of every insurable domestic building contract not yet at its Completion Date or terminated, plus the market value of speculative work where Home Warranty cover has commenced and the work is not complete. As read on 19 October 2026; general information, not legal or financial advice.

When are quarterly management accounts required for a Victorian builder?

Under clause 7.1(c) of the Guidelines, the quarterly requirement applies where the MCC is $2 million or more: Internal Management Accounts for each quarter, completed within 30 days of the end of each quarter, for the term 1 July 2026 to 30 June 2028. Clause 7.2(b) also requires quarterly Internal Management Accounts, within 30 days of each quarter end, for a builder under an MFR Agreement, without that $2 million condition. General information as read on 19 October 2026, not legal or financial advice.

What this analysis
does and does not show.

Evidence note

What it shows: What Victoria's Maximum Construction Capacity is, the instrument that sets it and its term, what it replaced and how a Letter of Eligibility carried across, how the Guidelines set it, what counts against it, and the obligations that run with it, as read on 19 October 2026 in the Gazette notice, the Building Act 1993 and the BPC's pages.
Key facts quoted: Building Act 1993 s 316A(1), (5), (7), Version 152; Gazette No. S 365 of 30 June 2026, clauses 2.1, 7.1, 8.1 to 8.3, 9.1, 10.1(i), 12.1, 14, 15, 16.1(h)(iii), 18, 22 and the definitions of MCC, Completion Date, Letter of Eligibility and Total Construction Limit; BPC statements on replacement of the DBI eligibility assessment, the active Letter on 30 June 2026, applying before a contract would exceed the limit, and the condition of registration.

The BPC pages and the Gazette notice were read through a rendering proxy on 19 October 2026 because the BPC site blocks automated access. The texts are saved with the article. The Act was read directly from the Victorian Legislation register.
The BPC page refers to a Letter of Eligibility active on 30 June 2026; clause 8.3 of the Guidelines refers to one current as at 1 July 2026. We quote both and do not reconcile them.
The BPC page also refers to a five business day notice if a builder becomes unable to pay its debts; we did not locate that provision in the Act or the Guidelines and have not relied on it.
We did not read the earlier Gazette No. G 26 of 25 June 2026 that S 365 withdrew, the Building (Statutory Insurance Scheme) Regulations 2026, or the BPC's approved template documents.
Victoria only. Other states' financial requirements for builders are not covered.
Nothing here is legal, financial or accounting advice, and it does not calculate or determine any builder's ANTA, capacity or compliance.

What to watch next

Each quarter end, plus 30 days: Internal Management Accounts for builders with an MCC of $2 million or more, through the term (cl 7.1(c)).
30 June 2028: end of the term: Section 316A(1) of the Act and clause 2.1 of the Guidelines both state the period ends on 30 June 2028.

Bring us your open contract list and your MCC letter.

Send us the list of domestic building contracts you hold today and the document that set your MCC. We will show you which contracts the Guidelines count, which Completion Date event each is waiting on, and whether your records could produce the total as at a date the BPC names.

This article is general information about a published Victorian instrument and regulator guidance. It is not legal, financial or accounting advice and it does not determine any builder's capacity, eligibility or compliance.

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Sources

Suggested citation: Minimum Financial Requirements and Administrative Guidelines 2026 (Victoria Government Gazette No. S 365, 30 June 2026) and Building Act 1993 (Vic) s 316A, Version 152, with Building and Plumbing Commission pages, as read 19 October 2026. One figure is derived: the $1 million ANTA Threshold at an MCC of $20 million under both clause 14 formulas, by substitution.

Victoria's builder capacity limit moved from the insurer's letter to the registration.