Tasmania to reintroduce Home Warranty Insurance 

Late last year, the Tasmanian Government announced its intention to reintroduce home warranty insurance following the high-profile collapse of a number of builders in the state. The government sought to consult with industry on the development of a new model for the home warranty scheme.  As part of the consultation process, a number of proposals were put forward aiming to balance consumer protection with the long-term economic viability of the scheme and building costs.  

To enable the reintroduction of the scheme, the Tasmanian Government has prepared a draft Residential Building (Home Warranty Insurance Amendments) Bill 2022.  

The passing of the Bill through Parliament will give effect to a Home Warranty Insurance Scheme by providing: 

• a mandatory, last resort scheme for residential building work that requires builders to take out home warranty insurance for the benefit of a home owner, and importantly, successors in title; 
• insurance cover for home owners for the loss of deposits, non-completion and defects subject to various financial caps where a builder has died, disappeared or become insolvent; and 
• an application trigger of $20,000, a six-year warranty period and a definition of residential building work that all align with the Residential Building Work Contracts and Dispute Resolution Act 2016. 

Minister for Workplace Safety and Consumer Affairs, Elise Archer said the draft Bill will ensure Tasmanians who build a home have the appropriate protections in place if their builder dies, disappears, or becomes insolvent. 

“We recognise that building a home is the most significant investment many Tasmanians will make, and we are committed to providing strong protections for homeowners undertaking residential building work”, Minister Archer added. 

In recognition that the reintroduction of home warranty insurance will impact a number of businesses in Tasmania, our Government commissioned a Regulatory Impact Statement (RIS) which further explains the proposed changes. 

The RIS assesses the costs and benefits of the proposed Home Warranty Insurance Scheme and has found that the Scheme will present a net benefit for Tasmanians. 

NIBA will be providing feedback on the draft Bill on behalf of members ahead of the due date on 31 March.