Strata building bond percentage increase

A change has been made to the Strata Schemes Management Regulation 2016 to defer the increase to the strata building bond percentage rate from 2% to 3% until 1 July 2025. 

The building bond applies to new strata buildings that do not have home building compensation insurance (Part 6 Home building Act 1989). It is held to secure funds to cover the cost of rectifying defective building work identified after construction and not rectified prior to the final building inspection reports​.

The developer lodges the building bond in the NSW Planning Portal. It is a prescribed percentage of the total cost of the building contracts. 

The increase of the building bond percentage rate to 3% will apply to all new applications from 1 July 2025.

The building bond is returned to the developer in the case of no defects being identified. When there is defective building work identified, an amount is paid to the owners corporation and where the cost of rectifying defects is less that the amount of bond secured, the remaining amount is returned to the developer.