Isn’t the builders’ margin limited by law? I could be wrong.
If it is then it doesn’t make sense to limit it further.
We use the NSW fair trading contract which limits it to 20%
The difference between 20% as a margin and 20% as a markup is huge when it is all the builder is making.
Cost $1,000, markup 20%, customer pays $1,200, builder makes $200
Cost $1,000, margin 20%, customer pays $1,250, builder makes $250
$250 vs. $200. So margin is 25% more than markup using 20% - and that's what fair trading allows. If you feel that you can't justify the 20% margin for some reason, then the equivalent margin would be 16.7% to achieve the same dollars.
But if you want to work with markup, then the NSW Fair Trading limit is markup by 25%.