Minimum Financial Requirements for domestic builders

Changes to MFR

From 1 July 2026, Minimum Financial Requirements (MFR) apply to:

• new applicants for domestic builder registration
• existing registered builders as an ongoing obligation and when seeking to increase their Maximum Construction Capacity

Minimum Financial Requirements are used to assess whether a builder has the financial capacity to carry out domestic building work and meet their obligations and to set a Maximum Construction Capacity.

They replace the current Domestic Building Insurance eligibility assessment process.

What is Maximum Construction Capacity?

Maximum Construction Capacity is the total value of domestic building work a builder can carry out at any one time.

It replaces the previous total construction limit used under Domestic Building Insurance.

Builders must monitor their work in progress and stay within their approved Maximum Construction Capacity. If you need more capacity, you must apply to BPC before you  enter into a contract that would cause, or is likely to cause, you to exceed your approved limit.

Compliance with Maximum Construction Capacity is a condition of registration.

When BPC may reassess your financial capacity

BPC may assess or reassess your financial capacity if you:

• apply to become registered as a domestic builder
• apply to increase your Maximum Construction Capacity
• exceed your approved capacity
• voluntarily provide financial information for reassessment
• are asked by BPC to provide updated financial information.

What builders need to demonstrate

To meet the Minimum Financial Requirements, builders must be able to show that they:

• can pay their debts when they are due
• have enough adjusted net tangible assets to support their approved Maximum Construction Capacity
• can operate within their approved capacity
• comply with any conditions set by BPC.

Adjusted net tangible assets are used to help BPC assess whether a builder has enough financial capacity for the amount of work they want to carry out.

How adjusted net tangible assets are calculated

For most builders, the amount of adjusted net tangible assets required depends on their Maximum Construction Capacity.

For Maximum Construction Capacity up to $20 million, the builder must have adjusted net tangible assets of at least 5% of their approved capacity, unless otherwise determined by the BPC.

For Maximum Construction Capacity above $20 million, a different calculation applies.

BPC may ask for financial information to support the assessment. This may include profit and loss statements, balance sheets, cashflow statements, information about work in progress, and evidence of assets or liabilities.

Builders operating through trusts, corporate groups or related entity structures should seek professional advice regarding how assets may be recognised for ANTA purposes.

Accountant requirements

Some financial information must be prepared or verified by an independent qualified accountant.

If your Maximum Construction Capacity exceeds $2 million, financial information must be prepared or reviewed by an independent qualified accountant. This cannot be done by an in-house accountant.

Builders with a Maximum Construction Capacity of $2 million or more must prepare quarterly Internal Management Accounts in accordance with the MFR Guidelines.

If you want to increase your capacity

If you want to take on more domestic building work, you need to apply to BPC to increase your Maximum Construction Capacity before you exceed your approved limit.

BPC will assess your financial capacity against the Minimum Financial Requirements.
If you do not currently meet the adjusted net tangible asset requirements for the higher capacity you want, BPC may, at its discretion, enter into a written MFR Agreement with you.

An MFR Agreement may provide a builder with a pathway to achieve compliance over time through agreed actions, milestones and reporting requirements that can include a financial plan, making a capital injection, reducing work in progress or providing a guarantee.

BPC will consider this on a case-by-case basis.

Will a guarantee assist a builder to meet the MFR?

Depending on the circumstances, BPC may consider guarantees, group structures, capital injections or other arrangements permitted by the MFR Guidelines. These are assessed on a case-by-case basis.

What happens to a builder’s existing Letter of Eligibility on 1 July 2026?

If you hold an active Letter of Eligibility on 30 June 2026:

• you do not need to reapply
• your approved limit becomes your MCC
• you will not be automatically reassessed on 1 July 2026
• you can continue operating under your approved MCC

BPC may reassess your financial capacity if you seek an increase, breach a registration condition or are subject to review.

If you become unable to pay your debts when they are due, you must notify BPC in writing within 5 business days of becoming aware of this.

Failing to notify BPC within this timeframe is a breach of your obligations and may result in regulatory action.

What builders should do now

Builders should prepare early.

You should:

• Actively monitor your work in progress to ensure you do not exceed your approved Maximum Construction Capacity at any time and consider your future pipeline of projects.
• understand your current approved construction limit
• consider whether you need to apply for a higher Maximum Construction Capacity
• calculate your adjusted net tangible assets
• speak to an independent qualified accountant if needed
• contact BPC early if you think you may have difficulty meeting the requirements.

Early engagement is strongly encouraged, especially if you want to grow your business, increase your approved capacity or manage financial changes.

If you do not meet the requirements

If BPC identifies a concern, BPC may work with you to understand your circumstances and determine the most appropriate regulatory action.

This may include requiring further information, asking you to reduce work in progress, requiring a financial recovery plan, or setting conditions that help manage risk.

Failure to comply with the Minimum Financial Requirements, a BPC direction or your registration conditions may lead to regulatory action.