Cooling-off period: what home buyers need to knowJun 1, 2021 9:00:00 AM
When you buy a home in Australia, the contract will normally specify a cooling-off period. This is the last chance to change your mind and cancel the sale without breaking the contract and facing heavy penalties. Sellers are not permitted to sell the property to anyone else during this period.
Cooling-off periods are protected by Australian consumer law, which varies across states and territories. Read this short guide to find out more about the cooling-off period and know your rights as a home buyer.
How long is the cooling-off period?
The number of days you have to change your mind depends on where the property is located, with some states and territories not requiring a cooling-off period. For most property purchases, expect:
- NSW, QLD & ACT: 5 business days
- NT: 4 business days (if you're not represented by a conveyancer or solicitor)
- VIC: 3 business days
- SA: 2 business days
- WA & TAS: no cooling-off period is required, but may be added to contracts
Note that this period covers business days only and does not include weekends and public holidays. This period may be extended by mutual agreement in some circumstances, such as if you need to wait for a loan to be approved.
The cooling-off period is usually longer for off-the-plan properties (10 days for NSW), as these contracts are generally more complex.
Do all property transactions have a cooling-off period?
A cooling-off period does not apply to properties bought at auction. The option may also be waived if the buyer agrees to a Section 66W Certificate.
Check with your conveyancer or solicitor if you're not sure what rules apply to your situation.
What happens during the cooling-off period?
The cooling-off period begins on the day you receive your copy of the unsigned property contract and ends at 5pm after the specified number of business days. You should receive your contract at least one day before the property agreement is signed.
You can use the cooling-off period to finalise financial arrangements and organise any reports or certificates needed. If you or your conveyancer find any problems or you change your mind, you have the right to cancel or terminate the contract before the period expires.
What happens if I change my mind?
If you decide to withdraw from your property contract during the cooling-off period, you will normally have to pay a fee to compensate the seller for their time and taking their property off the market. This penalty also varies by state and territory:
- NSW, QLD & ACT: 0.25% of total sale price
- VIC: 0.20% of total sale price
- SA: loss of holding deposit up to $100
- NT: no penalty
- WA & TAS: no cooling-off period unless agreed by the seller
You must write a letter or notice of termination to the property agent, but you are not required to explain your decision.
Cancelling a contract after the cooling-off period has ended will be more costly, as you will be required to pay default penalties and more compensation to the seller.
Where to get help
If you want more advice about buying a home in NSW or you want a conveyancer to represent you, call East Coast Conveyancing today on 1300 327 826.
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