Two Melbourne homeowners receive granny flat prices that look surprisingly close. One proposal asks for a substantial payment before the building reaches the property. The other divides payments across clearly defined construction stages.
The totals may look similar, but the owners are not accepting the same cash-flow risk.
Before comparing the headline number, check what you are paying for, when each payment becomes due and what evidence shows that the corresponding work is complete.
The quick answer
A useful granny flat price comparison should answer four questions:
- What is included in the contract price?
- How much is payable before work begins?
- What completed work triggers each progress claim?
- What remains unpaid until practical completion?
This sits alongside the broader granny flat cost guide, which explains the difference between the build price and the complete project budget.
Five payments that should not be treated as one
1. Feasibility or pre-construction fees
A land review, site investigation, drawings or engineering may be charged before the building contract is signed. These fees are not automatically the building deposit.
Ask what each fee buys, whether it is refundable, who owns the resulting documents and whether it is credited against a later contract. A clearly defined early service can reduce uncertainty. A vague upfront fee can simply move risk to the homeowner.
Your block should also be checked before the design and payment plan become fixed. Access, slope, easements, drainage and service distances can alter the scope. The Land Eligibility Check explains the main site questions.
2. The contract deposit
Consumer Affairs Victoria states that the maximum deposit for a domestic building contract is 10% when the contract price is under $20,000 and 5% when it is $20,000 or more.
For domestic building work over $16,000, the builder must generally provide an address-specific domestic building insurance certificate before taking a deposit or other payment. Check the certificate details rather than relying on a verbal assurance.
These are legal matters, so obtain independent advice about the contract and how the rules apply to your project.
3. Progress payments
Progress payments should correspond to completed work, not simply dates on a calendar. Consumer Affairs Victoria identifies the usual stages for a contract covering the entire build:
| Payment point | Usual share stated by CAV | What to check before paying |
|---|---|---|
| Deposit | Contract limit applies | Signed contract and required insurance evidence |
| Base | 10% | Defined base-stage work is complete and the required inspection has passed |
| Frame | 15% | The structural frame stage is complete and inspected as required |
| Lock-up | 35% | The external envelope has reached the contract's lock-up definition |
| Fixing | 25% | The specified internal fixing work is complete |
| Final payment | Balance under the contract | Practical completion, defects process and required completion documents |
The percentages above are the usual Victorian schedule described by Consumer Affairs Victoria for contracts covering every stage. A different construction model may require a different schedule, but it should be reviewed carefully before signing.
4. Variations and allowances
A progress payment is not the same as a price increase. The contract price may change through properly documented variations or adjustments to prime cost items and provisional sums.
If an amount is only an allowance, ask what assumption supports it and what happens if the actual work costs more or less. Selections, site discoveries and service requirements should not arrive as unexplained additions to a progress claim.
5. Final payment
The final claim is not just the last instalment. It is the point at which the owner should check the work against the contract, record defects and confirm which occupancy or completion documents are required.
The Council Approval Guide explains why planning and building approvals are separate questions. A project may also require final inspections and documentation before the new dwelling can be occupied.
What does “stage complete” actually mean?
The stage name alone is not enough. The contract should define the work included in each stage and the evidence required before payment.
Before paying a claim, check:
- the claimed stage matches the contract definition
- the specified work is visibly complete
- the relevant building surveyor inspection has passed where required
- approved variations are documented separately
- the amount matches the payment schedule
- defects or incomplete items are recorded in writing
Consumer Affairs Victoria advises owners not to pay in advance. Paying for incomplete work can weaken practical leverage and may create insurance problems.
Modular construction needs an especially clear payment map
A modular granny flat may be manufactured partly offsite. This can create a mismatch between factory milestones and familiar on-site stages such as base, frame and lock-up.
The solution is not to ignore progress payments. It is to make the contract more specific.
Ask where the module will be when a payment is due, what inspection evidence will be supplied, who owns the offsite materials, how they are insured, and what happens if transport or installation is delayed. Any alternative payment schedule should be independently reviewed before you sign.
Our How We Build page outlines the broader delivery sequence, but the signed contract must control the actual scope and payment terms for your project.
Compare granny flat prices with one payment table
Put competing proposals into a single table before choosing one:
| Question | Proposal A | Proposal B |
|---|---|---|
| Contract price and GST | ||
| Pre-construction fees | ||
| Deposit amount | ||
| Progress stages and percentages | ||
| Completion evidence for each stage | ||
| Prime cost items and provisional sums | ||
| Site work and service exclusions | ||
| Final payment trigger |
This exposes a common problem: the lower advertised price can require earlier payments, contain more allowances or exclude work that another proposal has already priced.
Check the land before fixing the payment plan
A payment schedule cannot make an uncertain scope certain. The block, access, services and approval pathway should be reviewed before too much of the price is committed.
If you are comparing granny flat prices for a Melbourne property, MPLUS can start with the address and identify the obvious site and planning questions. Use the Free Land Check before choosing a design or relying on a headline figure.
Sources checked
- Consumer Affairs Victoria: Deposits and payments
- Consumer Affairs Victoria: Building contracts
- Building Victoria: Agreements and contracts
- Consumer Affairs Victoria: Domestic building law changes
Information checked on 26 August 2026. Victorian domestic building reforms are scheduled to commence by 1 December 2026, so check current official guidance before signing a contract.
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