Understanding Cooling-Off Periods in Australian Property Law
Learn how cooling-off periods work in every Australian state, when they apply, when they don't (auctions), and how to exercise your rights to withdraw from a property contract.
Definition
Cooling-Off Period
A legally prescribed window of time after the exchange of contracts during which the buyer can rescind (cancel) a property contract, usually by paying a small penalty (typically 0.25% of the purchase price).
You have signed a property contract, but now you are having second thoughts. Perhaps the building inspection revealed unexpected problems, your finance fell through, or you simply realized the property is not right for you. In most Australian states and territories, the law provides a cooling-off period — a short window after exchange where you can withdraw from the contract, usually with a small financial penalty.
Understanding how cooling-off periods work, when they apply, and when they do not could save you from being locked into a purchase you cannot or should not complete.
What Is a Cooling-Off Period?
A cooling-off period is a legally prescribed window of time after the exchange of contracts during which the buyer can rescind (cancel) the contract. The purpose is to protect buyers — particularly inexperienced ones — from making hasty decisions under pressure. During the cooling-off period, the buyer can terminate the contract for any reason, but must usually pay a small penalty (typically 0.25% of the purchase price) to the vendor.
The cooling-off period begins when the buyer receives a copy of the signed contract (or, in some states, when the contract is formed). It runs for a set number of business days depending on the state.
Cooling-Off Periods by State
Cooling-Off Periods by State
| State | Period | Penalty | Legislation | Can Be Waived? |
|---|---|---|---|---|
| NSW | 5 business days | 0.25% | Conveyancing Act 1919 | Yes (Section 66W certificate) |
| VIC | 3 business days | $100 or 0.2% (greater) | Sale of Land Act 1962 | Yes (Section 31 certificate) |
| QLD | 5 business days | 0.25% | Property Law Act 1974 | Yes (Form 32a waiver) |
| WA | No statutory period | N/A | N/A | N/A |
| SA | 2 clear business days | None (full refund) | SA residential law | Yes (with legal advice) |
| TAS | Varies | Varies | Property Agents and Land Transactions Act 2016 | Yes (legal certificate) |
| ACT | 5 business days | 0.25% | ACT contract law | Yes |
| NT | 4 business days | As per contract | Law of Property Act 2000 | Yes |
In NSW, the cooling-off period starts when the buyer (or their solicitor) receives the signed contract, and the buyer must serve written notice to rescind. The deposit minus the 0.25% penalty is refunded. The period can be waived or shortened with a Section 66W certificate from the buyer's solicitor, which is common in competitive markets but carries risk. In Victoria, cooling-off does not apply to auction sales, and written notice must be given before the period expires. WA is unique in having no statutory cooling-off for standard private treaty sales — buyers should rely on finance and inspection clauses for protection. SA stands out for imposing no financial penalty when buyers exercise their cooling-off rights.
WA Has No Statutory Cooling-Off
Western Australia has no automatic cooling-off period for standard private treaty residential sales. Buyers in WA should ensure they have finance and building/pest inspection clauses in the contract, as these provide the primary mechanism to exit if problems arise.
When Cooling-Off Does NOT Apply
There are important situations where you do not get a cooling-off period:
Auction Sales
In every state and territory, properties purchased at auction have no cooling-off period. The contract is binding from the fall of the hammer. This is one of the biggest risks of buying at auction compared to private treaty — you must complete all due diligence (inspections, finance pre-approval, contract review) before auction day.
Post-Auction Private Treaty
If a property is passed in at auction and you negotiate a purchase immediately after the auction (often the same day), cooling-off typically does not apply in most states. Check your state's specific rules, as this varies.
Waiver by Certificate
As noted above, in NSW, VIC, QLD, and other states, the cooling-off period can be waived if the buyer's solicitor provides a written certificate. Agents in competitive markets may pressure buyers to waive cooling-off to make their offer more attractive. While this is legal, it is risky — you lose your safety net.
Commercial Property
Cooling-off periods generally apply only to residential property. Commercial and industrial property purchases typically have no statutory cooling-off protection.
Auction Purchases Are Final
Properties purchased at auction have no cooling-off period in any Australian state or territory. Complete all inspections, finance pre-approval, and contract review before bidding. The contract is binding from the fall of the hammer.
How to Exercise Your Cooling-Off Rights
- 1
Act quickly
The cooling-off period is short (2-5 business days). Do not delay.
- 2
Give written notice
Verbal communication is not sufficient. Send a written notice (email is usually acceptable, but check your state's requirements) to the vendor or their agent.
- 3
Keep proof
Send the notice by a traceable method and keep a copy. Ensure delivery before the deadline.
- 4
Contact your conveyancer immediately
They will handle the formal rescission process and arrange the return of your deposit (minus any penalty).
- 5
Note the deadline precisely
"Business days" exclude weekends and public holidays. Count carefully.
Should You Waive Your Cooling-Off Period?
In hot markets, vendors and agents often prefer offers without cooling-off conditions. Before waiving, consider:
- Have you completed all inspections? Building, pest, strata — do these before exchange if you plan to waive.
- Is your finance unconditionally approved? Pre-approval is not the same as unconditional approval. If your finance falls through without cooling-off, you could lose your deposit.
- Have you reviewed the contract thoroughly? Use a conveyancer and tools like Realestate Lens to identify all risks before committing.
- Can you afford to lose the deposit? Without cooling-off, you are legally bound. Defaulting on the contract could result in losing your entire deposit and potentially being sued for damages. See our guide on pulling out after signing a contract for a full breakdown of the consequences.
Before Waiving Cooling-Off
Only waive your cooling-off period if you have unconditional finance approval, completed all inspections (building, pest, strata), and had the contract fully reviewed by a conveyancer. The competitive advantage of waiving is not worth the risk if any of these steps are incomplete.
State-Specific Guides
For detailed cooling-off information for your state, see:
- Cooling-Off Period in NSW
- Cooling-Off Period in Victoria
- Cooling-Off Period in Queensland
- Cooling-Off Period in WA
- Cooling-Off Period in South Australia
- Cooling-Off Period in Tasmania
- Cooling-Off Period in the ACT
- Cooling-Off Period in the NT
Related Guides
- AI Contract Analysis — Get your contract reviewed in 60 seconds
- How to Read a Property Contract — Understand every section
- Red Flags in Property Contracts — Warning signs to watch for
Cooling-off periods exist to protect buyers, but they are not a substitute for thorough due diligence before exchange. Always have the contract reviewed by a professional, complete your inspections, and secure your finance before signing. If you do need to exercise your cooling-off rights, act immediately and follow the correct written notice procedures for your state. The small penalty is a fraction of the cost of being stuck in a contract you cannot fulfill.
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