Understanding Cooling-Off Periods
Learn about cooling-off periods by state, when they apply, and how to waive them if needed.
What is a Cooling-Off Period?
A cooling-off period is a legally mandated timeframe during which a buyer can withdraw from a property contract with minimal financial penalty. It's designed to protect buyers from making hasty decisions and gives them time to finalize finance, complete inspections, and seek legal advice.
Cooling-Off Periods by State
Each Australian state and territory has different rules for cooling-off periods:
| State/Territory | Cooling-Off Period | Penalty to Exit |
|---|---|---|
| New South Wales | 5 business days | 0.25% of purchase price |
| Victoria | 3 business days | $100 or 0.2% (whichever is greater) |
| Queensland | 5 business days | 0.25% of purchase price |
| Western Australia | No statutory cooling-off | N/A |
| South Australia | 2 clear business days | $100 |
| Tasmania | No statutory cooling-off | N/A |
| Australian Capital Territory | 5 business days | 0.25% of purchase price |
| Northern Territory | 4 business days | N/A |
When Cooling-Off Does NOT Apply
There are several situations where cooling-off rights don't apply:
- Properties purchased at auction
- When the buyer has signed a Section 66W certificate (NSW) waiving the cooling-off period
- Commercial or business properties (in most states)
- When exchanging contracts on the same day in some states
- If the property is purchased via a "put and call" option
How to Exercise Your Cooling-Off Rights
To withdraw during the cooling-off period, you must provide written notice to the vendor or their agent before the period expires. Keep proof of delivery (email receipt, registered post, etc.). The penalty amount will be deducted from your deposit and the remainder returned.
Waiving the Cooling-Off Period
In competitive markets, vendors may request buyers waive their cooling-off rights to provide certainty. In NSW, this requires a Section 66W certificate signed by a solicitor confirming the buyer has received legal advice. Only waive cooling-off if you're certain about the purchase and have completed all due diligence.
Making the Most of Your Cooling-Off Period
Use this time wisely:
- Get unconditional finance approval from your lender
- Complete building and pest inspections if not already done
- Have your solicitor thoroughly review the contract
- Verify strata reports and any easements or restrictions
- Confirm the property matches all marketing claims
- Check council records for any development applications nearby
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