A new trust account framework began on 1 March 2021. When fully rolled out by 1 January 2023, the framework will apply to most payments made within Queensland’s building industry.

Phase 3 of this new regime commenced on 1 January 2022 which means that certain private sector and government contracts in Queensland – those valued at $10 million or more – will now require a Project Trust Account.

This is the first time Project Trust Accounts have been required in Queensland for non-government contracts.

Key takeaways

  • The Project Trust Account regime has now been rolled out to the private sector and a broader range of government entities as of 1 January 2022.
  • This regime will apply to contracts worth $10 million or more from 1 January 2022, before the threshold then drops to $3 million from 1 July 2022, and to $1 million from 1 January 2023.
  • You must keep comprehensive records for both Project Trust Accounts and Retention Trust Accounts for at least 7 years. See a full list of documents here.
  • Retention Trust Accounts are required to be reviewed by a registered company auditor annually and on closure of the account.
  • Head contractors tendering for contracts caught by the regime should ensure they make allowances for the cost of operating Project Trust Accounts and the associated administrative obligations when tendering for the work.

From 1 January 2022 – Phase 3

A Project Trust Account is required for the following:

  • All Queensland Government contracts (including Hospital and Health Services) valued at $1 million or more; and
  • Private sector, local government, Queensland statutory authorities and government-owned corporations – for contracts valued at $10 million or more.

A Retention Trust Account is required for the following:

  • Both the contracting party (that is, the principal) and contracted party (that is, head contractor) to the Project Trust contract must hold eligible cash retention amounts in a Retention Trust Account;

Note, state government, statutory authority and local government principals are exempt from the requirement to hold cash retentions in a Retention Trust Account.

What are Project Trust Accounts?

Project Trust Accounts (formerly Project Bank Accounts) are designed to protect payments and retentions across the industry.

They do this by ensuring that any money paid by a principal is held by the head contractor on trust for the benefit of the contractor and its subcontractors. Importantly, they provide extra protections for subcontractors if a builder becomes insolvent.

Types of Trust Accounts 

There are two different types of Trust Accounts you may require depending on the contracts you enter for work – these are Project Trust Accounts and Retention Trust Accounts.

  1. Project Trust Accounts – These accounts protect progress payments and only one account is required to be opened for each Project Trust contract.
  2. Retention Trust Account – This account is only for cash retentions and only one account is required per contractor in which retention money from all of their Project Trust contracts can be retained. (Note, contractors can also have one for each project if they prefer).

How does the regime work and what does it apply to?

The new regime creates a statutory trust, and requires head contractors to establish and manage a bank account for that trust, known as the ‘Project Trust Account’. This is a bank account with an approved financial institution, which meets certain minimum requirements.

The regime applies to contracts where over 50% of the contract price is for ‘project trust work’ and there is at least one subcontractor engaged for all or part of the contracted work. This includes the erection or construction, renovation, alteration, extension, improvement or repair of ‘buildings’, and related site work. Buildings are defined broadly to include any fixed structure that is wholly or partly enclosed by walls or a roof. There are a range of exclusions for particular sectors and types of work or contract, and other work such as pure maintenance contracts.

Compulsory Training and Auditing for Retention Trust Accounts

A trustee or the person nominated by the trustee of a Retention Trust Account must complete compulsory Retention Trust training.

Retention Trust Accounts must also be reviewed by a registered company auditor to ensure the trustee has complied with the requirements of the Building Industry Fairness Act 2017.  The auditor must prepare an account review report to be provided to the QBCC, as well as reporting any serious breaches in relation to the administration of the trust account.

The Retention Trust Account must be reviewed every 12 months, starting from when the account was opened, and when the account is closed.

Further rollout of the Project Trust Account regime

Previously Project Trust Accounts were only required for state government and Hospital and Health Services contracts valued at $1 million or more. However, since 1 January 2022, the regime has now been extended to the private sector, and the broader government sector, for contracts valued at $10 million or more (excluding GST).

That threshold will then drop to $3 million from 1 July 2022, and to $1 million from 1 January 2023 as follows when the final phases are rolled out:

  • 1 July 2022 – adds in all private sector, local government, statutory authorities’ and government-owned corporations’ contracts valued at $3 million or more.
  • 1 January 2023 – final phase of all eligible contracts (public and private sector) valued at $1 million or more.

Source: QBCC

Will it apply to my contract?

The Queensland Building and Construction Commission (QBCC) has developed a Project Trust Account tool to help businesses determine if a Project Trust Account is required. This is a helpful tool, but legal advice should also be obtained if businesses are in doubt. The QBCC also keeps a publicly available register of trust accounts.

What do I need to do?

There are extensive requirements for head contractors, who have to act as trustees and establish and manage the trust account. They also have to hold any retention monies in a Retention Trust account.

Principals who are awarding contracts over $10 million also have obligations under the Act, including to ensure that a trust account is established if they know that one is required, and to ensure payments are only made into that account.

It is also worth noting current contract terms will generally require some updating to deal with the new regime and its requirements. Legal advice should be obtained before updating these contracts.

What happens if I do not comply?

There are significant penalties for non-compliance with the Project Trust Account regime by principals, builders and subcontractors.

Due to the significant administrative and financial burden of complying with the regime, in addition to the penalties for non-compliance, we recommend you review your current and future contracts to both:

  1. Determine if a Project Trust Account and Retention Trust Account are currently required; and
  2. Work out if the future threshold decreases coming into effect 1 July 2022 and 1 January 2023 are likely to require you to comply with the Project Trust Account regime in the near future.


The rollout of the trust account framework is affecting more and more businesses in the Queensland construction industry and come 1 January 2023, will apply to most payments made within the industry.

Therefore, given the increased administrative and financial burden of complying with the above regime and the penalties for non-compliance, we recommend you ensure you are up to date with these changes, reducing thresholds and compliance dates.

Contact Pilot

If you have any questions about how the Project Trust Account regime affects your business, or wish to discuss audit requirements, please do not hesitate to contact Daniel Gill, Cain Hammond or Sally Diacaris or your Pilot advisor on [email protected] or (07) 3023 1300.