QBCC Regulations: Trust Account Requirements for Builders Over $3m & $1m 

In the world of construction, staying ahead of QBCC regulations is critical. If you’re a builder operating in Queensland, the Queensland Building and Construction Commission (QBCC) has some significant updates on the horizon that you need to be aware of. Starting from March 2025, builders will be required to maintain a trust account for contracts over $3 million. This requirement will expand to contracts over $1 million from October 2025. 

Understanding and complying with these changes can seem daunting, but let’s break it down into manageable bits. Whether you’re a seasoned tradie or a business owner in the construction industry, this overview will help you to navigate these upcoming requirements. 

Phased Implementation Timeline 

The QBCC has introduced a phased approach to trust account requirements, impacting contracts based on their value and the principal involved. Here’s an overview: 

• March 2025: Builders are required to establish a trust account for contracts over $3 million, covering contracts with State Government Authorities, Local Governments, and private entities. 

• October 2025: This requirement extends to contracts over $1 million, marking a full implementation across all contracting parties. It also includes any contracting party where a project trust account is required for the head contract, enhancing security for funds across the construction industry. 

These thresholds mean that from October 2025 onwards, any builder working on a contract exceeding $1 million will need to comply with QBCC’s trust account requirements. This structured approach is designed to support businesses in gradually adopting the new regulations and ensuring thorough financial accountability. 

Why the Change? 

The QBCC’s initiative to enforce trust accounts is part of a broader push towards enhancing transparency and security within the construction industry. By implementing these measures, they aim to protect subcontractors and ensure that funds are appropriately managed throughout the lifecycle of a project. 

What Does This Mean for You? 

For builders, the QBCC regulations update means that you’ll need to establish and manage a trust account specifically for each project that meets the monetary threshold. This account will act as a secure holding space for all payments related to the project, ensuring that subcontractors and suppliers are paid promptly and fairly. 

Key Requirements 

1. Establish a Trust Account: For any contracts exceeding $3 million (from March 2025) and $1 million (from October 2025), you must open a trust account dedicated solely to that project. 
2. Transparency in Transactions: All payments, including those to subcontractors and suppliers, must be made from this trust account. This ensures a clear trail of transactions, enhancing financial accountability. 
3. Regular Audits: The QBCC will conduct periodic audits to ensure compliance. Being proactive in maintaining accurate records will save you from potential penalties and disruptions. 
4. Software Compliance: With new trust account requirements, it’s essential to choose software solutions that are compatible with the QBCC’s regulations. Make sure your accounting tools are up to date to facilitate smooth transactions and reporting. 

To see the complete requirements, visit QBCC’s regulation update. 

Preparing for the Transition 

Get Your Financial House in Order

Before the changes take effect, conduct a thorough review of your current financial practices. Assess your cash flow, project budgeting, and payment systems to identify any gaps or weaknesses that could be affected by the new requirements. This is the time to streamline your financial processes and ensure they align with the upcoming regulations. 

Choose the Right Trust Account Software

The Department of Housing, Local Government, and Planning is working with software providers to develop compliant solutions for trust accounting. As these tools become available, it’s crucial to integrate them into your business operations. Look for software that offers robust reporting features, easy-to-use interfaces, and strong security protocols to protect your data. 

Train Your Team

Your team, especially those handling financial transactions, must be fully aware of the new regulations and how to manage trust accounts. Investing in training sessions can be beneficial to avoid costly errors and ensure compliance from day one. 

Delegate Responsibilities

If managing trust accounts is outside your area of expertise, consider outsourcing this responsibility to a qualified accountant or financial professional. They can handle the day-to-day operations of the trust account, ensuring all transactions are compliant and that you’re meeting all QBCC requirements. 

The Importance of Compliance 

Failing to comply with these new requirements on QBCC regulations can lead to severe consequences, including hefty fines and possible suspension of your licence. More importantly, non-compliance can damage your reputation within the industry and lead to a loss of trust among your clients and subcontractors. 

What You Need to Do Next 

• Consult Your Accountant: Discuss the upcoming changes with your accountant to understand how they will impact your business specifically. They can provide valuable insights and help you prepare a compliance strategy. 

• Update Your Contracts: Make sure all your contracts reflect the new requirements. Clear communication with your clients and subcontractors about the use of trust accounts will help prevent misunderstandings and disputes. 

• Stay Informed: The QBCC will continue to release updates and resources as the implementation date approaches. Make it a point to stay informed by regularly checking their website or subscribing to their newsletter. 

Conclusion 

Navigating changes on QBCC regulations can be challenging, but being proactive can turn a potential obstacle into an opportunity for growth. By preparing now, you can ensure that your business not only complies with the new requirements but also operates more efficiently and transparently. 

As a builder, your focus should be on delivering quality projects. Understanding and implementing these new QBCC requirements with a trusted team like Wardle Partners Accountants & Advisors will allow you to do just that, without the added stress of compliance issues hanging over your head. 

Did You Know? 

The QBCC’s trust account framework isn’t just a compliance tool—it’s designed to protect everyone involved in a construction project. For subcontractors, it ensures they get paid promptly for their work. For builders, it promotes better financial management and reduces the risk of disputes and financial mismanagement. It’s a win-win for the industry, fostering a more stable and trustworthy construction environment.