Some might be surprised that in some Australian states it is not only legal, but common, to withdraw from a certain property purchase even if a contract has already been signed.
The cooling off period allows buyers a little time to reconsider their decisions without heavy consequence.
For anybody stepping into the world of buying a property, grasping this concept really matters.
It’s a built-in safety measure which is present in many Australian property contracts, but not everywhere or in every situation.
This blog covers everything about the cooling-off periods in Australian real estate.
What Is A Cooling-Off Period?
A cooling off period is a set timeframe after signing a property contract during which buyers can cancel the deal for any reason without facing hefty penalties.However, it’s important to understand the risks of signing unconditional contracts, as they do not offer this safety net, potentially exposing buyers and sellers to significant financial consequences.
Typically lasting between 2 to 5 business days, depending on the state, it gives buyers breathing room. During this time, you can review the contract, arrange inspections, or secure financing.
The goal? To ensure you’re fully comfortable with your decision before it becomes legally binding. Consulting a conveyancer in Melbourne can help clarify the terms and make this process smoother.
However, this period isn’t a free pass. If you decide to back out, you’ll usually pay a small penalty—often a percentage of the purchase price. This protects sellers from losing out entirely while still giving buyers flexibility.
How Long Is The Cooling Off Period Across Australia?
The duration of the contract cool off period varies significantly across Australian states and territories.
Understanding these differences is crucial when buying a property in different jurisdictions.
| State/Territory | Cooling Off Period | Withdrawal Penalty |
|---|---|---|
|
New South Wales |
5 business days | 0.25% of purchase price |
| Victoria | 3 business days | 0.2% of purchase price |
| Queensland | 5 business days | 0.25% of purchase price |
| South Australia | 2 business days | Up to $100 of deposit may be forfeited |
| Western Australia | No statutory period | Not applicable |
| Tasmania | No statutory period (unless specified in contract) | As per contract terms |
| Australian Capital Territory | 5 business days | 0.25% of purchase price |
| Northern Territory | 4 business days | As per contract terms |
It’s worth noting that the cooling period contract generally begins when the buyer receives a copy of the signed contract or when specific disclosure requirements are met, depending on state legislation.
When Does the Cooling-Off Period Apply?
The cooling period contract typically applies to private treaty sales—where you negotiate directly with the seller. However, there are exceptions. Properties bought at auction don’t come with a cooling-off period because bids are final.
Similarly, if you buy a property within two business days of an unsuccessful auction where you were a registered bidder, the period doesn’t apply. Buyers can also waive their rights to this period in writing before signing, often to make their offer more appealing in competitive markets.
For leases, it’s a different story. There’s no cooling off period for lease agreements in Australia. Once you sign a lease, you’re committed unless the landlord agrees to let you out or there’s a legal reason, like an uninhabitable property.
Under Which Circumstances The Cooling Off Period Does Not Apply?
Not all property transactions come with the safety net of a cooling off period.
Key exceptions include:
- Properties bought at auction
- Properties purchased within two business days after an unsuccessful auction by a bid.
- Agency transactions where buyers have formally waived their cooling-off rights
- Commercial property purchases in various jurisdictions
- Wherein the buyer is a company in some states
An experienced conveyancer will clarify your particular rights and will ensure that you understand fully the implications of your property purchase agreement.
Why To Withdraw During The Cooling-Off Period?
Buyers might pull out for several reasons. Maybe a building inspection reveals hidden issues, or your loan falls through. Sometimes, financial circumstances shift unexpectedly.
Whatever the cause, the cooling off period in real estate exists to give you that safety net. It’s wise to act fast—arrange inspections or consult your lender within those few days to avoid being locked in.
How To Cancel During The Cooling-Off Period?
The last day for a buyer to withdraw is usually 5 PM, and to complete the process, one has to send in a written notice to the seller or their agent during the cooling-off period. A commonly used solution is to hire a conveyancer in Melbourne who draws this notice to ensure it satisfies legislative requirements. Following the handing over of the notice, the contract is terminated, and the buyer will probably forfeit a part of their deposit as a consequence.
Do Sellers Have A Cooling-Off Period?
No. The sellers do not have a cooling-off period. As soon as they have signed the contract, they are bound legally to fulfill it unless their parties wish to terminate it or one of them breaches it.
Make Confident Property Decisions With Eagle Peak
Understanding cooling-off periods is just one step in making a smart property purchase. Speaking in line with this, speaking to property conveyancing in Melbourne experts is highly advisable before you sign any contract.
At Eagle Peak Conveyancing, our conveyancers in Melbourne guide you through every stage, ensuring clarity, confidence, and the best possible outcome.
Whether you’re buying your first home or adding to your portfolio, our expert team is here to help. Reach out today and take the stress out of property buying!
