Building Cost Declarations in Victoria: Key Changes to Form 1
A critical part of the building permit process is to accurately calculate the cost of building works. In Victoria, this step has recently evolved, with the introduction of an updated method of how costs are declared and assessed on Form 1 (building permit application form).
What’s New on Form 1?
Notably, the BPC system now utilizes a benchmark-driven approach. While authorities previously accepted the contract sum at face value, the system now cross-references every declaration against standardized construction rates and scope assumptions.
Standardised Cost Benchmarks
The BPC platform cross-references the declared value on Form 1 against standardised industry rates. If the nominated cost falls significantly below these benchmarks, the system triggers a manual review.
Broader Scope and Risks
The Victorian government has expanded the definition of “Cost of Building Work.” Consequently, the figure you enter on Form 1 must represent the full value of construction.
Increased Scrutiny of Cost Declarations
Relevant Building Surveyors (RBS) are now legally empowered and required to refuse a permit if they are not satisfied that the cost declaration is reasonable. This has led to a marked increase in Requests for Information (RFIs), requiring applicants to provide comprehensive cost breakdowns
Costs declared on Form 1 must now capture the full scope of building work, including site works, structural elements, finishes, fixed services, and relevant owner‑supplied items.
Why it matters?
Understating project costs even by mistake carries significant risks under the new BPC scrutiny. Because the Form 1 declaration directly determines the state levy, the commission is increasingly issuing Requests for Information (RFIs) or demanding detailed cost breakdowns before a permit is granted.
- Permit Friction: Conservative estimates are now more likely to cause “friction” at the lodgement stage. Leading to weeks of back-and-forth with building surveyors.
- Post-Approval Audits: The BPC has the authority to reassess costs and adjust levies even after the permit has been issued if the final scope doesn’t match the initial Form 1 declaration.
Therefore, understanding this shift is essential for architects, builders, and developers to avoid costly delays and unexpected levy adjustments.
Calculating the cost of building works
Under the new Section 3A of the Building Act, you must calculate the cost of building work using a prescribed formula. Beginning 26 November 2025, these new formulas become mandatory and must include GST in all amounts.
In order to explore these specific calculation methods, visit the BPC Website.
