Significant changes are on the horizon for NSW’s building and construction industry, reshaping prefabricated construction, building approvals, design variations and regulatory accountability.
The Building (Approvals and Practitioners) Bill 2026 (NSW) (Bill) passed the NSW Parliament on 4 August 2026.
Introduced to Parliament on 6 May 2026, the Bill forms part of the government’s plan to address the NSW housing supply crisis. It seeks to do so by repealing and replacing:
- the Design and Building Practitioners Act 2020 (NSW) (DBP Act) and accompanying regulations, and
- the Building and Development Certifiers Act 2018 (NSW) and accompanying regulations.
The Bill will also amend several other pieces of legislation, including:
- the Environmental Planning and Assessment Act 1979 (NSW) (EP&A Act)
- the Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020 (NSW)
- the Home Building Act 1989 (NSW) (Home Building Act), and
- the Strata Schemes Development Act 2015 (NSW).
There is currently no commencement date. The government has indicated that this will allow the supporting regulations provided for by the Bill to be developed with oversight from the Building Commission NSW, which will administer the legislation.
According to the Bill’s champion, the Hon. Anoulack Chanthivong, the Bill ‘is focused on building quality and safety and will achieve significant construction productivity gains by removing unnecessary, outdated and duplicative administrative processes embedded in the current legislation’.1
Prefabricated/off-site construction
The government sees prefabricated/off-site construction of modular homes (prefabricated buildings) as ‘a key part of solving our current housing challenges’, stating that ‘[n]ot only are they more efficient, but modern methods of construction result in fewer building defects due to manufacturing in a controlled environment that is not impacted by the weather or other site factors’.
According to the government, a key barrier to increasing the supply of prefabricated buildings is that ‘prefabricated construction is regulated inconsistently or not at all in building regulation’, which ‘creates uncertainty for consumers as to what they are buying, uncertainty to lenders financing these projects, and inconsistency in building quality due to poor regulation’.
The Bill intends to achieve consistency in the regulation of the construction and supply of prefabricated buildings by removing the existing exemption for manufactured homes from the definition of ‘building’ under the EP&A Act. The government states that, ‘[r]emoving this exemption ensures that all buildings are treated consistently under the law, regardless of where they are constructed’.
This means that the Home Building Act and its requirements, including those concerning licensing, consumer protections and contractual requirements, will apply to prefabricated buildings where the work can be defined as ‘residential building work’.
Consistent building standards will also apply to prefabricated buildings in the same way that they apply to other dwellings.
The manufacturer of the prefabricated building will need to provide a ‘prefabricated building declaration’ to attest that, as manufactured, it meets the requirements of the Building Code of Australia and any additional requirements made by the regulations.
This declaration can then be relied on by the approval authority as part of the new approval process.
Streamlined approvals process
The Bill introduces a new digitally-based approvals process that will replace the current building work certification requirements in Part 6 of the EP&A Act and will also integrate the design and building declaration requirements established under the DBP Act.
The role currently served by a construction certificate will be fulfilled by a ‘building approval’, while the occupation certificate will be replaced by a ‘completion approval’. Similarly, the existing Principal Certifying Authority (PCA) role will be assumed by an approval authority, which will typically be the local council or a registered private certifier.
Although it was the government’s intention to ‘streamline’ the building approval framework by ‘consolidating the planning and building approval processes into a single piece of legislation’, some in opposition had warned that ‘changes to certification and approval processes appear to be change for change's sake [which] require new forms, new systems, new training and re‑education across the industry’.
The government stated that a key reason for the Bill was to fix ‘years of ad hoc changes and bandaid solutions that have only served to burden the system’.
Only time will tell whether the new reforms will indeed streamline the building approvals process and lead to an increased and more efficient housing supply, or instead add another layer of regulatory compliance.
Variations and modifications
The Bill seeks to address the well-known issue that arises when variations to the design or building works, while practically necessary and uncontroversial, require the applicant for a construction or occupation certificate (usually the builder or developer) to return to the original consent authority (usually the council) to obtain a modified development consent, known as a section 4.55 application.
This is a costly process that leads to delays and disruptions and does not necessarily result in better building outcomes. The Bill will allow the approval authority to consent to variations if satisfied that the approval would have been issued had the works been included in the original development application.
This amendment acknowledges that building work is fluid by nature and that it is not always practical for an applicant to seek a formal consent modification from the council every time the design or other building work changes.
As a safeguard, the approval of any design change or variation cannot be given retrospectively, and there are strict penalties if this occurs.
Increased penalties for approval authorities
Under the Bill, the current fine of $33,000 will increase markedly to $1.1 million where an approval authority (currently known as a PCA) either contravenes the conflict-of-interest provisions or acts other than impartially when granting approvals under the new framework.
This addresses a common perception that private PCAs may act at the direction of the builder or developer when certifying the works, as they are effectively engaged by that party. It will also help deter corrupt conduct by other stakeholders, including bribery, coercion and improper influence to facilitate the approvals process to their advantage.
The increased penalties (which include imprisonment) seek to protect the integrity of the new approvals process by acting as a significant deterrent to misconduct.
Omissions from the Bill
Notably, the Bill omits several measures that many industry and government stakeholders consider necessary:
- Many of the substantive details have been deferred to the regulations and are therefore neither currently known nor subject to parliamentary oversight.
- The Bill contemplates the establishment of a Queensland-style low-cost defect dispute resolution tribunal in NSW, which would lead to efficiencies by keeping building disputes out of the NSW Civil and Administrative Tribunal and the courts, but does not include a date by which this is to be established, leaving the concept in limbo.
- The Bill does not redress the alleged imbalance created by the High Court decision in Pafburn Pty Limited v The Owners - Strata Plan No 84674 [2024] HCA 49, which many consider to have shifted the balance too far against builders and developers by making them wholly responsible for defects in all construction works, no matter which party was directly responsible. This could have been addressed by expressly legislating that the statutory duty of care created by s 37 of the DBP Act is subject to the proportionate liability provisions under Part 4 of the Civil Liability Act 2002 (NSW).
Looking ahead
As with any new legislative reform, it remains to be seen whether the streamlined approvals process proposed by the Bill will have a meaningful impact on easing the housing crisis.
Perhaps the most significant policy shift reflected in the Bill is the government’s recognition that the construction and supply of prefabricated buildings will play an important role in the future of housing supply.
1 Legislative Assembly Hansard – 06 May 2026: Building (Approvals and Practitioners) Bill 2026.
