Does the QLD Home Warranty Cover Investment Properties?

If you are building or renovating an investment property in Queensland, it’s important that you can trust your contractor to do a professional job. Generally, most building contractors are good, honest business people, but there are a few rogue traders who have given us a bad name.

This is why Queensland’s Home Warranty Scheme works to protect you from shoddy workmanship and no-shows. Depending on your circumstances, the insurance will pay up to $200,000 on claims if your building contractor fails to complete the agreed work or something goes wrong during the building process. Read on to find out whether you are eligible and what the insurance will cover. 

What Does Queensland’s Home Warranty Scheme Cover?

Your building contractor must take out home warranty insurance on your behalf from the Queensland Building and Construction Commission (QBCC).

The insurance is compulsory on all building or renovation projects that cost more than $3,300 - including materials, labour, and Goods and Services Tax (GST).

The scheme only applies to new and existing residential properties and is collected as part of your building or renovation contract.

Unfortunately, not all building and construction work is covered under the scheme. You won’t be eligible for home warranty cover if your project is:

• More than three storeys above a car park
• A registered retirement village
• Commercial premises
• Any building not for residential purposes

How Long Does Home Warranty Cover Last?

Home warranty insurance policies last for six years and six months from the date the contract is entered into, the premium is paid, or when the work commences - whichever happens first.

The policy can be extended by six months if the building work took longer than six months to complete.

Does It Cover Investment Properties?

Yes, the Home Warranty Scheme does cover investment properties, providing they are:

• Residential and not commercial
• No more than three storeys (above a car park).
• Not located in a registered retirement village
• The work is valued at more than $3,300

It’s helpful for investors because the insurance covers the property itself, rather than the owner. This means that if the home is sold within the six years and six months time period, the insurance is passed on to the new owner.

It’s important to note that the insurance cannot be transferred to a new contractor. If the job is started by one builder and finished by another, the new builder must take out separate insurance.

How Much Does It Cost?

The cost of the home warranty will be included as part of your total contract price and calculated based on the insurable value of the work, including GST.

Your contractor will calculate the insurance premium for you and pay QBCC on your behalf.

If you feel you need more than the $200,000 insurance premium, you can opt to pay for additional cover.

How Do I Make a Claim?

You can claim on Queensland’s Home Warranty Scheme if:

• Your contractor has not completed the work
• Your building is damaged by fire, vandalism, theft, or extreme weather
• The contractor does not rectify anything that goes wrong during the building process

You can lodge a complaint on the QBCC website and they will determine whether you are eligible for a claim.

How to Ensure Your Builder is Compliant?

In Queensland, builders who do not comply with the Home Warranty Scheme will face severe penalties. But you should always double-check your contract to ensure home warranty insurance is included.

You can further minimise your risk and avoid cowboy builders by working with our trusted team at Builder Direct.

After 25 years of constructing investment properties across North Queensland, we have built a reputation for providing homeowners with hassle-free and trustworthy services.

When you work with us, we’ll handle everything from sourcing land to building your new property, and our fixed price contracts mean you’ll know all costs upfront, with no nasty surprises.

Learn more about our quality services by filling in the enquiry form on our website or by calling 07 4042 7777.