In New South Wales, most residential property purchases come with a 5-business-day cooling off period. This gives buyers a window to change their mind after signing — but it costs 0.25% of the purchase price to exercise. Here is everything you need to know.
What Is the Cooling Off Period in NSW?
The cooling off period in NSW is 5 business days from the date the buyer exchanges contracts. During this time, the buyer can pull out of the purchase by providing written notice to the vendor or their solicitor. If they do, they forfeit 0.25% of the purchase price as a penalty.
When Does the Cooling Off Period Not Apply?
- Auction purchases: There is no cooling off period for properties sold at auction. Once the hammer falls, the contract is unconditional.
- Properties sold on the same day as auction: If a property sells before or after auction on the same day, no cooling off applies.
- When both parties agree to waive it: The buyer can sign a 66W certificate (waiving the cooling off period) — typically done when the buyer has already completed finance approval and inspections and wants to exchange unconditionally.
Cooling Off Period in NSW vs Victoria
| NSW | Victoria | |
|---|---|---|
| Cooling off period | 5 business days | 3 business days |
| Penalty to pull out | 0.25% of purchase price | 0.2% of purchase price |
| Applies at auction? | No | No |
| Can be waived? | Yes (66W certificate) | Yes (s.31 statement) |
Should I Use the Cooling Off Period to Do My Due Diligence?
Ideally, no. Due diligence — building and pest inspection, solicitor review, finance confirmation — should be completed before you exchange contracts wherever possible. Using the cooling off period as a due diligence window is a risky strategy that can result in a 0.25% penalty if you discover a problem that causes you to pull out.
Frequently Asked Questions
How much does it cost to pull out during the cooling off period in NSW?
0.25% of the purchase price. On a $900,000 property, that is $2,250.
Can the vendor pull out during the cooling off period?
No — the cooling off period is a right for the buyer only. The vendor is bound by the contract once they sign.
What is a 66W certificate in NSW?
A 66W certificate is a legal document signed by the buyer’s solicitor that waives the cooling off period. It is typically used when the buyer wants to exchange unconditionally after completing all due diligence.
Get Professional Guidance Before You Exchange
A Collings Property Advisor helps you complete due diligence before exchange — so you never need to use the cooling off period as a safety net. Fixed fee $4,500 + GST. Get started at collings.com.au/portal.
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