A cooling-off period gives a home buyer the right to withdraw from a contract of sale within a set number of business days after exchange, usually by paying a small penalty. Cooling-off rules differ significantly by state — and importantly, they do not apply to auction purchases. Here is the complete picture.
Australia-wide, purchasing property at auction carries no cooling-off period. When you are the successful bidder, you are immediately and legally bound. There is no right to withdraw. This is why building inspections, contract reviews, and mortgage pre-approval must all be completed before the auction.
| State | Period | Penalty to Withdraw | Notes |
|---|---|---|---|
| NSW | 5 business days | 0.25% of purchase price | Applies to all residential purchases except auctions |
| VIC | 3 business days | 0.2% of purchase price | Does not apply to commercial, subdivisions, or auctions |
| QLD | 5 business days | 0.25% of purchase price | Applies to residential contracts; exclusions include auctions and some commercial |
| WA | 3 business days | 0.25% of purchase price | The 3-day period begins when the buyer (not agent) receives the signed contract |
| SA | 2 business days | 0.25% of purchase price | Applies to residential property |
| TAS | 3 business days | 0.25% of purchase price (capped at $100) | Some commercial properties excluded |
| ACT | 5 business days | 0.25% of purchase price | Applies from the day the buyer receives the signed copy |
| NT | 4 business days | 0.25% of purchase price | No cooling-off for commercial properties |
Penalty is on the full purchase price, not the deposit. In NSW, withdrawing during cooling-off on a $900,000 property costs $2,250 — even if you only paid a $1,000 holding deposit. The penalty is calculated on the contract price.
To withdraw during the cooling-off period, you must notify the vendor (or their agent) in writing before the cooling-off period expires. The notification must be delivered (not just sent) within the period. Use a conveyancer to manage this — the exact form of notice and delivery method matter, and errors can cost you the right to withdraw.
In addition to auctions, cooling-off typically does not apply to:
In NSW, a buyer can waive the cooling-off period by providing a Section 66W certificate, signed by their solicitor or conveyancer. This is sometimes requested by vendors who want certainty (particularly in competitive markets) — and is common when a buyer is purchasing on the same day as selling their existing property and needs simultaneous settlement.
The difference and why unconditional approval matters at exchange.
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