The drip pricing measure being flagged to builders does not capture site cost allowances or provisional sums. A different section captures how a build is sold.
Australia has a new unfair trading law. The Competition and Consumer Amendment (Unfair Trading Practices) Act 2026 received assent on 2 July 2026 as Act No. 64 of 2026, and it commences on 1 July 2027.
Builders are already being told that the drip pricing part of it puts an end to advertising a base price and adding site costs later. That is not what the provision does. The section that could reach a residential sales process is a different one, and it works on the process rather than on the price display.
What the Act actually does
The Act inserts three things into the Australian Consumer Law. A general prohibition on unfair trading practices towards consumers, at section 28B. A disclosure duty about transaction based charges, at section 48A, aimed at drip pricing. And a set of obligations for subscription contracts.
All three commence together on 1 July 2027. That is twenty two months from now, which is unusually long runway for a consumer law change and reflects how much of the detail is left to regulations still to be made.
One clarification first, because the two get confused constantly. This is not the crackdown on unfair contract terms. That regime polices what a contract says. This one polices how a business behaves before and around the transaction. A builder can have a clean contract and still be exposed under this Act, and the reverse is also true.
Why the drip pricing section does not reach a builder’s site costs
Section 48A applies to offers to supply goods or services of a type ordinarily acquired for personal, domestic or household use or consumption. A new home built for someone to live in would ordinarily fall within that description, though the point has not been tested against a domestic building contract. It does not apply where the offer is made exclusively to a body corporate.
So far so relevant. The problem is what the section actually requires disclosed.
Section 48A(6) defines a base price as including an amount payable for the goods or services themselves. A transaction based charge is defined by contrast. It is a charge payable in connection with the supply rather than for the goods or services themselves, calculated by reference to the particular transaction or the way the transaction is carried out. The examples in the explanatory material are booking fees and service fees. Section 48A(8) then carves out charges payable at the option of the purchaser, and taxes, duties, fees and levies.
Read that against a residential quote. A site cost allowance is an amount payable for the building work. So is a provisional sum, a prime cost item, a slab upgrade, a retaining wall, a bushfire attack level upgrade. They are the price of the work itself. They are not charges sitting alongside the price, calculated by reference to how the transaction is carried out.
That means section 48A does not attach to them. What it would attach to is the smaller material bolted on beside the build price. An administration fee. A documentation or contract preparation fee. Anything charged in connection with the transaction rather than for the work. Whether allowance based estimating erodes margin is a real commercial question, but it is not the question this section asks.
Base price and transaction based charge
Under section 48A of the Australian Consumer Law, a base price is an amount payable for the goods or services themselves. A transaction based charge is a charge payable in connection with the supply rather than for the goods or services themselves, calculated by reference to the particular transaction or the way it is carried out, such as a booking fee or a service fee. From 1 July 2027 a supplier offering a base price must disclose the amount of any applicable transaction based charge alongside it, or the method of calculating that charge where the amount cannot be worked out at the time.
The single price rule already covered this ground
None of this leaves base pricing unregulated. Section 48 of the Australian Consumer Law has required a single price since 2009, and it applies to the same class of consumer goods and services.
The single price is the minimum quantifiable consideration at the time of the representation. That phrase is the reason base pricing has survived for as long as it has. Costs that genuinely cannot be quantified until the site is assessed are not part of the minimum quantifiable consideration, so they do not have to be folded into the advertised figure. Costs the builder can quantify are a different matter.
This is worth sitting with, because it means the legal position on how a building business presents price publicly did not change on 2 July 2026 and does not change on 1 July 2027. It has been the position for seventeen years. Submissions to the consultation from the legal profession made exactly that point, arguing that harmful drip pricing was already covered by the existing prohibitions and that no gap justified a new provision. The Government proceeded anyway.
Section 28B is the provision that reaches the sales process
The general prohibition is the part of this Act that should hold a builder’s attention.
Section 28B prohibits conduct, in trade or commerce, in connection with the supply or possible supply of goods or services to a consumer, that manipulates the consumer or unreasonably distorts the environment in which the consumer makes a decision, and that causes or is likely to cause detriment. Both limbs have to be met.
Three features of that drafting matter. The word unreasonably was removed from the manipulation limb between the draft and the final version, and kept only in the distortion limb. Detriment only has to be likely, not actual. And detriment is not confined to financial loss, so wasted time and lost choice can count.
The exposure is not the base price. It is a process built so the real number cannot be seen until the client is committed.
Where that lands in a residential sales process
The explanatory material is careful on one point. Manipulation is not intended to capture legitimate, reasonable or generally accepted marketing or sales practices. A clearly stated base price with honest allowances is not the target of this section.
What the distortion limb is aimed at is conduct that pushes a consumer into proceeding with a transaction they would otherwise have been unlikely to proceed with, or that obstructs them from acting on a decision they have already made.
The exposure is not the base price. It is a process built so the real number cannot be seen until the client is committed. A site cost allowance set below what the builder already knows the site will cost. Prime cost sums set below any selection the client is realistically going to make. The real figure deferred to a colour selection appointment that happens after the deposit is banked. We have written about what a poor sales process actually costs in commercial terms. This adds a regulatory cost to the same behaviour.
None of that was previously fine. It was already exposed to the prohibitions on misleading conduct. What section 28B adds is a route that does not require anyone to prove the client was actually misled.
The exclusion worth reading twice
Sections 28B(3) and 28B(4) disapply the general prohibition where the consumer is a body corporate, or where the supply is in the course of the consumer carrying on a business. The evidential burden of relying on that exception sits with the person relying on it.
For a builder that draws a line straight through the client book. An owner occupier building a home to live in is covered. A developer client, or a client buying through a company or a trust structure for an investment build, is not. Same builder, same contract documents a client signs, different legal exposure depending entirely on who is on the other side.
What builders get as buyers, not sellers
The general prohibition and the drip pricing duty protect consumers only. Neither protects a builder buying from a supplier. The subscription measures are different, and they are the only part of this Act that extends to small business.
A subscription contract qualifies where it is a standard form contract and the subscriber has fewer than 100 employees or annual turnover below $10,000,000. That covers most of the software a building business runs on. From 1 July 2027 those suppliers have to disclose prescribed information when the offer is made, give notices at set points such as before a free period ends or a price changes, and make every available cancellation method easy to find and straightforward. For anyone running a building business on a stack of annual subscriptions, that is the most immediately useful thing in the Act.
Treasury consulted between 3 June and 10 July 2026 on whether the general prohibition should be extended to small businesses and franchisees. That has not been decided.
Penalties and what happens next
The new provisions sit inside the standard civil penalty regime, which became materially more serious earlier this year. For conduct on or after 28 March 2026 the maximum for a corporation is the greater of $100 million, three times the value of the benefit obtained, or 30 per cent of adjusted turnover during the breach turnover period. For an individual, the maximum for contravening the general prohibition is $2,500,000.
Those are ceilings for the worst conduct, not going rates. Courts weigh the conduct, its duration, the harm and the size of the business. Infringement notices are available for the general prohibition, and the courts can order adverse publicity or disqualify a person from managing corporations.
The Minister must cause a review of the new measures within two years of commencement. The detail that is still missing sits in regulations yet to be made, particularly for subscriptions, and in whatever guidance the regulator publishes before the start date.
THE GOOD BUILDER TAKE
The consultancy pitch on this reform will be that drip pricing rules are coming for base pricing. Read the sections and that falls over. Site costs are the price of the work, and the drip pricing duty is about charges that sit beside the price. The provision that actually reaches a builder is the general prohibition, and it does not care what is on the price list. It cares whether the process was built so the client could see the real number before they were committed. A builder whose allowances are honest has twenty two months of runway and very little to do. A builder whose allowances are a sales tactic now has a second regulator problem on top of the commercial one.
Frequently asked questions
No. The drip pricing provision at section 48A requires disclosure of transaction based charges, which are charges payable in connection with a supply rather than for the goods or services themselves. Site cost allowances, provisional sums and prime cost items are amounts payable for the building work, so they fall outside that provision. Separately, section 48 of the Australian Consumer Law has required a single price since 2009, and that has not changed.
The Competition and Consumer Amendment (Unfair Trading Practices) Act 2026 received assent on 2 July 2026 and commences on 1 July 2027. Conduct before that date is assessed under the existing provisions.
Two limbs, both of which must be satisfied. The conduct must manipulate the consumer or unreasonably distort the environment in which the consumer makes a decision, and it must cause or be likely to cause detriment. Detriment is not limited to financial loss and can include wasted time. The explanatory material states that legitimate, reasonable or generally accepted marketing and sales practices are not intended to be captured.
No. Section 28B does not apply where the consumer is a body corporate or is acquiring in the course of carrying on a business. The only new measure extending to small business is the subscription contract regime, which applies to standard form contracts where the subscriber has fewer than 100 employees or annual turnover below $10,000,000. Treasury consulted in mid 2026 on extending the wider protections to small businesses and franchisees, and that has not been decided.
The provisions attract the standard Australian Consumer Law civil penalties. For conduct on or after 28 March 2026 the corporate maximum is the greater of $100 million, three times the value of the benefit obtained, or 30 per cent of adjusted turnover during the breach turnover period. The individual maximum for contravening the general prohibition is $2,500,000. Infringement notices, adverse publicity orders and disqualification orders are also available.
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Sources: Competition and Consumer Amendment (Unfair Trading Practices) Act 2026 (Act No. 64 of 2026) register record, Federal Register of Legislation; Parliamentary Library Bills Digest No. 58, 2025-26; Australian Parliament House bill homepage r7468; Treasury consultation listing; Australian Competition and Consumer Commission fines and penalties guidance.
Last updated 2 September 2026. This article will be reviewed when the regulator publishes guidance on the new provisions and when the Government responds to the small business consultation.
General information only. This article describes changes to Commonwealth legislation and is not legal or financial advice. It does not take account of any particular business or contract. The Good Builder recommends obtaining professional guidance specific to your circumstances before acting on anything set out here.
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