Cooling-Off Period
A period after signing a contract of sale during which the buyer can withdraw (usually with a small penalty). Varies by state — typically 2-5 business days. Does not apply to auction purchases.
Plain-English definition. A cooling-off period is a short statutory window after signing a contract of sale during which the buyer can withdraw without proving any reason, usually with a small forfeit fee.
How it works in Australia. Periods vary sharply by state: NSW gives 5 business days (forfeit 0.25% of price), Victoria gives 3 business days (forfeit $100 or 0.2%, whichever greater), Queensland gives 5 business days (forfeit 0.25%), South Australia gives 2 clear business days (no forfeit), Western Australia and the ACT have no statutory cooling-off period for residential sales. Cooling-off does not apply to auction purchases, nor to most commercial property sales. See NSW Fair Trading on cooling-off.
Concrete example. You sign a contract for a $850,000 home in Sydney on a Monday afternoon. Your cooling-off period runs 5 business days, ending 5pm the following Monday. On Friday, your building inspection finds major structural cracks. You serve a cooling-off notice, forfeit 0.25% ($2,125) and walk away — far cheaper than the $85,000 (10%) deposit you'd lose post-cool-off.
Common confusion. The cooling-off period can be waived by signing a "section 66W certificate" (NSW) or equivalent — vendors and agents often pressure buyers to waive it. Waiving means you're unconditional on signing. Buyers also forget the period excludes weekends and public holidays.