Property sellers in Victoria will have to pay for building and pest inspections ahead of a home sale to share with potential buyers under a new election promise.
The Victorian government has pledged to make pre-sale building and pest inspections the responsibility of homeowners if re-elected at the November state election.
It’s the latest Aussie jurisdiction to consider flipping the cost after the ACT introduced similar rules that require vendors to pay for building and pest inspections before offering a home for sale.
Homebuyers often organise and pay for building and pest inspections for each home they consider purchasing, costing hundreds of dollars per home.
REA Group senior economist Eleanor Creagh said the move would cut some upfront costs for buyers.
"Requiring sellers to provide a building and pest inspection before a property is listed could help improve transparency in the buying process and reduce some of the upfront costs buyers face when competing for homes,” Ms Creagh said.
"In competitive markets, buyers can end up with substantial costs for inspections across multiple properties they don’t ultimately purchase.
Building and pest inspections can uncover hidden problems with a property before buying, saving buyers from costly surprises later. Picture: Getty
"In practice, part of the expense would likely be incorporated into the final sale price, meaning buyers may still indirectly bear some of the cost. And some buyers may still choose to commission their own inspection for full confidence."
The state government plans to consult with the ACT and the real estate industry on the mandatory building and pest inspections scheme, and intends to legislate the new rules in early 2027.
Premier Jacinta Allan said the status quo wasn’t working.
"Some buyers spend thousands on multiple reports," she said. "Some roll the dice and go without."
REA Group senior economist Eleanor Creagh says requiring sellers to provide a building and pest inspection could reduce some of the upfront costs for buyers.
“When you buy a car, the seller pays for the roadworthy. It should work the same way when you look for a home."
The government said the scheme would protect buyers above all, with safeguards to prevent low-quality reports and conflicts of interest.
The Consumer Policy Research Centre (CPRC) found in 2022 that building and pest inspections in Victoria could cost up to $600 together per home.
A CPRC survey of 500 Victorians showed that 17% of buyers paid for seven or more reports during their home buying journey, costing thousands of dollars collectively.
Victorian premier Jacinta Allan says the status quo isn’t working. Picture: NewsWire/ David Crosling
It also showed that 17% of buyers chose not to undertake an inspection due to the cost and hassle.
At the time, the CPRC called for vendors to provide independent building and pest inspection when selling a home.
The move to shift the cost of building and pest inspections from buyers to sellers was also one of eight recommendations made by the Real Estate Institute of Victoria in January.
Real Estate Institute of Victoria chief executive Toby Balazs has been calling for building and pest inspection reports to be included in vendor's statements. Picture: Supplied
The REIV called for building and pest inspection reports completed by a registered inspector to be included in a vendor’s statement.
While the real estate peak body welcomed the announcement, REIV chief executive Toby Balazs reminded the government not to view the change in isolation.
“The government’s willingness to accept our important recommendation regarding the inclusion of building and pest inspection reports in vendor’s statements, and the positive impact this will have on prospective buyers, is encouraging, but it’s only a first step,” Mr Balazs said.
“Central to the REIV’s blueprint is striking the right balance between supporting the interests of both prospective buyers and vendors in the context of residential property transactions.
"This means government avoiding a heavy-handed approach that places an excessive regulatory burden on vendors, while not adequately protecting their fundamental right to achieve the best possible sale price."
Mr Balazs said the state government should consider its other recommendations and revisit its proposed mandatory seven-day reserve price disclosure requirement for auctions.
In the ACT, sellers pay for inspection reports that must be completed within three months before the sale.
Once the sale contract is signed, sellers can recover the costs from the successful buyer.
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