NSW owner-builder insurance is wrapped in a decade-old myth: that you need Home Building Compensation cover to sell your home. You don’t — you can’t even buy it, and haven’t been able to since 2015. What NSW actually requires is a specific set of obligations during the build and a disclosure regime when you sell. This guide is the current position, in order.
Verify against NSW Fair Trading and SIRA before acting — this is general information, and thresholds move.
During the build: your side of the insurance ledger
- Construction works + public liability — not mandated by statute, but NSW officially recommends liability cover strongly, and building uninsured is gambling the project. The owner-builder insurance guide covers both policies.
- Workers compensation — required if you directly employ labour (icare policy once wages pass roughly $7,500/yr), and labour-only contractors you direct like employees can be deemed workers. Genuine contractors carry their own.
- Personal accident cover for you, voluntary workers cover for helpers — workers comp protects neither you nor the weekend volunteers.
During the build: your contractors’ side
Any contractor you engage directly for residential work over $20,000 must provide Home Building Compensation cover for their contract, through icare HBCF. This is their legal obligation, not a favour — and the certificate is your evidence.
Selling within 7.5 years: the s95 warning
Sell the property within 7 years 6 months of the permit being issued (note: the permit date, not completion) and the contract of sale must include a conspicuous consumer warning stating:
- that an owner-builder permit was issued for the land, and its date; and
- that the owner-builder work is not required to be insured under the Home Building Act.
That’s the whole insurance story at sale — a warning, not a policy. Omitting it attracts fines and gives the buyer leverage. HBC cover for owner-builder work was abolished on 15 January 2015; anyone telling you to budget thousands for “owner-builder warranty insurance” in NSW is reading the old law.
The warranties that follow the house anyway
No insurance at sale doesn’t mean no liability. The statutory warranties on your work — 6 years for major defects, 2 years for other defects, from completion — pass to whoever buys the house, and they can enforce them against you personally in NCAT. A breach surfacing in the final six months of the period extends the buyer’s time to act.
The sequence, so nothing is missed
- Before contracts: price construction + liability cover; make contractor HBC certificates (over $20,000) and licence checks a written precondition.
- During the build: collect every certificate as trades finish; keep the photo archive.
- At handover: switch to home and contents the day the occupation certificate issues.
- If you sell within 7.5 years of the permit: conveyancer inserts the s95 warning; hand over the documentation pack.
- Until year six: keep the file. The warranties are still alive.