A cooling-off period is a set number of business days after signing a contract of sale during which a buyer can withdraw from the purchase, usually for any reason. It is a consumer protection mechanism designed to give buyers time to get legal and financial advice, complete due diligence and change their mind if needed — without losing their full deposit.
How Long Is the Cooling-Off Period in Each State?
| State | Cooling-Off Period | Penalty for Withdrawal |
|---|---|---|
| Victoria | 3 business days | 0.2% of purchase price |
| New South Wales | 5 business days | 0.25% of purchase price |
| Queensland | 5 business days | 0.25% of purchase price |
| Western Australia | 3 business days (offer and acceptance) | Negotiable — typically agent commission |
| South Australia | 2 business days | Small admin fee |
| ACT | 5 business days | 0.25% of purchase price |
When Does the Cooling-Off Period NOT Apply?
In most states, the cooling-off period does not apply to properties purchased at auction, properties purchased on auction day even if not at auction, commercial property purchases, and in some states properties above certain price thresholds. In Victoria, the cooling-off period does not apply to properties sold at auction or within 3 business days before or after a scheduled auction.
How Do I Use the Cooling-Off Period Effectively?
Use the cooling-off period to: get your conveyancer to review the contract and Section 32 in full, arrange a building and pest inspection, confirm your finance pre-approval is sufficient and the lender is comfortable with the property, and check planning overlays and any council notices. Do not sign a contract expecting to rely on the cooling-off period as a routine negotiation tool — it is a last resort, not a due diligence substitute.
Frequently Asked Questions
Can I extend the cooling-off period?
Yes — in most states the buyer and vendor can agree in writing to extend the cooling-off period. This is relatively common when a buyer needs more time to arrange finance or inspections.
Can the vendor withdraw during the cooling-off period?
No. The cooling-off period is a buyer’s right only. The vendor is bound by the contract once both parties have signed.
What happens to my deposit if I withdraw during cooling-off?
You will forfeit the penalty amount (e.g. 0.2% in Victoria) but the remainder of your deposit must be returned to you. Make sure your deposit is held in a trust account — not released to the vendor — during the cooling-off period.
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