Currently in NSW, builders who propose to do residential building work valued at more than $5,000 need a building license before they are legally permitted to conduct those residential building works. These licensing requirements are currently captured within the Home Building Act 1989 (NSW) (‘HBA’), which broadly outlines licensing requirements for builders who will conduct “residential” or “specialist” building works.
However, this is soon set to change as the NSW Government proposes to implement new legislation in NSW to reform the licensing regime currently captured within the HBA.
The new licensing regime under the proposed Building Bill 2022 (‘the Bill’) will eliminate ‘contractor licenses’ in NSW. Instead, an individual who intends to ‘carry out’ regulated building work will be required to be licensed under the Bill, regardless of whether the work they conduct is residential or commercial.
What Work Will Need a Licence?
Under the Bill, a person carrying out ‘regulated work’ will need to be licensed. Generally, ‘regulated work’ will require a person to be licensed, or, require a person to carry out works under the supervision of a licensed individual under the following types of works:
- Specialist work;
- Engineer work; and
- Building work.
It is to be noted that civil construction works are not captured under the Bill, and as such, a license for these types of works will not be required under the Bill. This aligns with how the law currently treats civil construction works, meaning no changes will be made. The NSW Government have noted that if evidence supports a change, there is potential for civil construction works to be captured in future reforms.
Proposed Licensing Framework
The Bill reduces the types of licenses currently available under the HBA. The Bill will only provide for ‘provisional’ and ‘full’ licenses.
The NSW Government also proposes under the Bill to reduce the current threshold value for when a builder is required to hold a license from $5,000 to $3,000. The NSW Government proposes to change this to capture more building work and provide consumers with better protection. This change will limit the work that can be done without a licence to works under $3,000.
Furthermore, it is intended that the regulations to the Bill will specify certain types of work where a license is mandatory regardless of the value. These include specialist work such as air-conditioning, draining, electrical, gas fitting, plumbing, mechanical services, medical gas, refrigeration, waterproofing, as well as pre-purchase building and pest inspections.
Proposed License Classes
We outline broadly below the proposed license changes the NSW Government intends to include within the new licensing framework under the Bill, and how this will change current licensing requirements.
Exclusions from the Licensing Regime
The Department has provided a high-level summary of certain trades that are intended to be excluded from the proposed licensing framework. These are outlined directly below:
| Trade / vocation | Current License Requirements | Proposed outcome |
| Minor trade work -Paving | Work over $5,000 requires a minor trade work licence.
| Work over the threshold will require a structural landscaping, bricklaying, or general concreting licence |
| Minor trade work – Kitchen/bathroom bench installation | Work over $5,000 requires a minor trade work licence
| Work is included as part of Builder D licence or stonemasonry licence dependent on work. |
| Minor trade work – Splashbacks | Work over $5,000 requires a minor trade work licence
| Work over the threshold will require a glazing or tiling licence |
| Minor trade work – Shower screen enclosure installation | Work over $5,000 requires a minor trade work licence
| Work over the threshold will require a glazing licence |
| Minor trade work – Shade sails and awnings | Work over $5,000 requires a minor trade work licence
| Work over the threshold will require a carpentry licence |
| Minor trade work – Installation of security doors, grilles and equipment | Minor trade work licence holders don’t require licence under Security Industry Act 1997 regulated by NSW Police
| Minor trade work licence will be removed, and practitioners will require licence under Security Industry Act 1997 regulated by NSW Police |
| Minor trade work – Bitumen surfacing | Work over $5,000 requires a minor trade work licence
| No longer licensed |
| Minor trade work – ducting/mechanical ventilation | Work over $5,000 requires a minor trade work licence
| No longer minor trade work. New licence class proposed for this type of work. |
| Minor trade work – Solid Fuel heater installation | Work over $5,000 requires a minor trade work licence and also mentioned in mechanical services licence
| To be reviewed within mechanical services licence. To be considered for roof plumbing licence or no longer licensed. |
| Disconnection and reconnection of fixed electrical equipment | Specialist category of licence
| No longer licensed – incidental electrical work included in work authorised by relevant licence |
| Decorating | Work over $5,000 requires a decorating licence
| No longer licensed |
| Fencing | Work over $5,000 requires a fencing licence
| Retain fencing licence for swimming pool barriers only (see item 3.5.4) |
| Swimming pool repairs and servicing | Work over $5,000 requires a swimming pool repairs and servicing licence | No longer licensed |
| Non-structural flooring | Work is unlicensed
| No change – Work is unlicensed |
| Demolition | Regulated via the Work Health and Safety Regulation 2017
| No change – Regulated via the Work Health and Safety Regulation 2017 |
| Scaffolding | Regulated via the Work Health and Safety Regulation 2017
| No change – Regulated via the Work Health and Safety Regulation 2017 |
Newly Proposed Classes:
The Government intends to implement the following new building license classes:
| Licence class | Scope of Work | |
| Builder A | Unrestricted | Work on any class of building |
| Builder B | Medium-rise | Work on any class of building up to 3 storeys |
| Builder C | Low-rise | Work on Class 1 and Class 10 buildings |
| Builder D | Internal fit-outs | Non-structural building work and fit-outs on any class of building |
The NSW Government have also provided a Licensing Proposal attachment paper outlining how they intend to regulate each category of building work under the new licencing regime. Should you wish to know how the new Licencing regime will impact your specific trade, a link to this attachment paper can be found here.
Conclusion
The proposed framework for the new licensing regime that will be implemented under the Bill is still subject to change. The NSW Government is seeking continued input from stakeholders to further refine the proposed licensing regime and help develop the supporting Regulations to the Bill.
Should you wish to know specifically how the proposed Bill will apply to your trade, we at Keystone will be able to provide you with advice specific to your circumstances.