A progress payment schedule is the agreed plan for how and when you pay your builder throughout a construction project. Rather than paying a lump sum upfront or at the end, payments are released in stages as specific milestones are reached — protecting both you and your builder throughout the build.
What Is a Progress Payment Schedule?
In New Zealand, most residential building contracts use a progress payment schedule (sometimes called a stage payment schedule). This is a written agreement — usually part of your building contract — that sets out:
- The stages of construction that trigger a payment
- The percentage or dollar amount due at each stage
- The timeframe for payment after an invoice is issued
Progress payments are standard practice for new builds, major renovations, and large extensions. They give your builder cash flow to pay subcontractors and suppliers, while ensuring you only pay for work that has actually been completed.
Typical Build Stages and Payment Percentages
While every contract is different, a common residential build in NZ might follow a schedule similar to this:
| Stage | Description | Typical % of Contract Price |
|---|---|---|
| Deposit | Signing of contract / mobilisation | 5–10% |
| Foundations | Slab or foundation poured and inspected | 15–20% |
| Frame | Wall and roof framing complete, inspected | 15–20% |
| Enclosed / Weathertight | Roof on, windows and exterior cladding in | 15–20% |
| Interior fit-out | Linings, cabinetry, fixtures installed | 15–20% |
| Practical completion | Code Compliance Certificate applied for | 10–15% |
| Final payment | CCC issued, keys handed over | 5–10% |
These percentages are a guide only — your actual schedule will depend on your contract, the size of the project, and your builder's requirements. Always read the schedule carefully before signing.
Your Legal Protections as a Homeowner
NZ law provides important protections around progress payments:
The Construction Contracts Act 2002
The Construction Contracts Act 2002 governs payment claims and schedules for most building work in NZ. It sets out rules around payment claims, payment schedules, and dispute resolution. Under this Act, if you receive a valid payment claim from your builder, you must respond with a payment schedule within the timeframe specified in your contract (or the Act's default timeframes) — otherwise you may become liable for the full claimed amount.
Building Contracts and Consumer Protections
For residential work over $30,000, your builder is required to provide a written contract. MBIE Building Performance has guidance on what a residential building contract must include, and it's worth reviewing their resources before you sign anything.
Licensed Building Practitioners
For restricted building work (structural, weathertight, and certain other work), your builder must be a Licensed Building Practitioner (LBP). Confirming your builder's licence before signing a contract — and before making any payments — is strongly recommended.
What to Check Before Agreeing to a Schedule
Before you sign a contract with a progress payment schedule, make sure you:
- Understand each milestone — what exactly triggers each payment, and who confirms the stage is complete
- Check the deposit amount — a deposit over 10% is unusual for residential work; be cautious of builders asking for large upfront sums
- Confirm inspection requirements — some stages require a building inspector's sign-off before payment is released; this is good practice and protects you
- Know your payment timeframe — contracts typically require payment within 5–20 working days of a valid invoice
- Understand retention clauses — some contracts allow you to hold back a small percentage (often 5–10%) until the Code Compliance Certificate (CCC) is issued
- Get independent advice — consider having a lawyer or quantity surveyor review the contract before signing
Protecting Yourself During the Build
- Never pay ahead of a stage — only release payment once the agreed milestone is genuinely complete
- Do a site visit at each stage — walk through the work with your builder before signing off
- Keep records — retain copies of all invoices, payment receipts, and correspondence
- Understand your dispute rights — the Construction Contracts Act provides a formal process if you and your builder disagree on a payment claim
- Check your builder's insurance — confirm they hold public liability and contract works insurance before work begins
BRANZ and Consumer NZ both offer useful guidance on homeowner rights during construction projects.
When to Call a Professional
If you're unsure about any aspect of your progress payment schedule or building contract, don't guess — get professional advice. A lawyer experienced in construction contracts can review your agreement before you sign. A quantity surveyor can independently assess whether the work at each stage genuinely matches the payment being claimed. If a dispute arises, the Construction Contracts Act provides adjudication as a faster alternative to court.
Finding a reputable, experienced builder in your area is the best first step. You can search for qualified local builders on tradedirectory.co.nz and check that they hold a current LBP licence at lbp.govt.nz.
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