6 Stages of Progress Payments When Building a House

Progress payments are staged payments you make as each major phase of the build is completed, instead of paying the full price up front. The stages and the percentage for each should be written into your contract, and you should only pay when the stage is actually finished.

The 6 usual stages

1. Deposit. Often around 5 percent, or the legal maximum.
2. Base or slab. Around 10 to 15 percent.
3. Frame. Around 15 to 20 percent.
4. Lock up. Around 20 to 25 percent.
5. Fixing. Around 15 to 20 percent.
6. Practical completion. Around 10 to 15 percent.

These percentages are typical examples. Your contract sets the actual stages and amounts.

6 ways to protect yourself

1. Check that each payment matches a clearly defined stage in the contract.
2. Ask to see the work, or an inspection report, before paying.
3. Do not pay ahead of progress.
4. Keep a record of every invoice and payment.
5. Have a building inspector check key stages if you want extra confidence.
6. Ask for a final inspection and a defects list before the last payment.

Red flags

• A large deposit
• Payments that run ahead of the work
• Vague stage descriptions
• Pressure to pay quickly

This article is general information, not legal or financial advice. Check your contract and any lender requirements.

Frequently asked questions