A cooling-off period is a set period (usually a certain number of days) in which your buyer can contemplate the terms of purchasing the property. During this time, they may elect to cancel the transaction and terminate your legal agreement.
The terms of a cooling-off period depend on two things – how the property was sold and in which state. If a property is sold via auction, there is no cooling-off period. As for state-based information, refer to your state in the list below to find out which cooling-off regulations apply to your property sale.
Please note this information is not exhaustive. We recommend seeking the advice of your chosen legal advisor before entering a contractual agreement.
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New South Wales
In NSW, buyers are given a cooling-off period of 5 business days. The period begins once contracts are exchanged and terminates at 5:00pm on last business day. During this time, your buyer can cancel the transaction if they provide written notice. However, they must pay a termination fee of 0.25% of the agreed purchase price.
Note, you and your buyer have the right to waive, shorten, or extend the cooling-off period via a written agreement.
QLD regulations are in line with NSW. A cooling-off period of 5 business days applies to residential property sales, which begins once the buyer receives their copy of the signed contract and terminates at 5:00pm on the final business day. You and your buyer may choose to waive or shorten the cooling-off period, so long as it is in writing.
If the buyer elects to cancel the transaction during the cooling-off period, their deposit must be refunded within 14 days but you have the right to deduct a penalty fee of up to 0.25% of the agreed purchase price.
The Victorian government has declared that buyers are entitled to a 3-business day cooling-off period. Should they decide to terminate the contract, they must inform you in writing. In this case, you have the right to retain the greater of $100 or 0.2% of the purchase price from their deposit.
Western Australia does not have a mandatory cooling-off period for real estate transactions. However, if you and your buyer wish to have a cooling-off period, it must be clearly defined and included in the contract.
In South Australia, the cooling-off period is two business days. However, the start date depends on when the buyer receives the Form 1. If the Form 1 was received prior to the contract being made, then the start date begins once the contract is exchanged. If the contract is made but the buyer has yet to receive the Form 1, then the cooling-off period begins once the buyer receives the Form 1.
The cooling-off period is only available to the buyer – you, the vendor, are bound to the agreement once contracts are exchanged. Should your buyer decide to withdraw during the cooling-off period, they must provide you with written notice, and you have the right to withhold a penalty fee of up to $100 from their deposit.
Tasmania does not recognise cooling-off periods. Once contracts are signed and exchanged, the sale is final – similar to selling by auction.
Australian Capital Territory
Similar to NSW and QLD, buyers in the ACT are entitled to a cooling-off period of 5 business days. If your buyer wishes to terminate the contract during this time, they must provide you with written notice and pay a penalty fee of 0.25% of the purchase price.
In the Northern Territory, buyers are provided with a cooling-off period of four business days, during which they can terminate the contract without penalty. You and your buyer can arrange to waive, reduce, or extend the cooling-off period within your contract.
(REISA), T. (2020). Cooling off Period and Form 1. Retrieved December 07, 2020, from https://www.reisa.com.au/publicinfo/steps-in-the-selling-process/cooling-off-period-and-form-1
Canberra, A. (2003). Reality Check a real estate guide for buyers and sellers in the ACT [PDF]. Canberra: Access Canberra.
Government of Western Australia, D. (2016, December). Sale by offer and acceptance [PDF]. Perth: Gordon Stephenson House.
Government, N. (2019, August 02). Contract of sale. Retrieved December 07, 2020, from https://nt.gov.au/property/buying-and-selling-a-home/get-help-with-the-contract/contract-of-sale
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NSW, F. (2020, November 30). Contracts and deposits. Retrieved December 07, 2020, from https://www.fairtrading.nsw.gov.au/housing-and-property/buying-and-selling-property/buying-a-property/contracts-and-deposits
Queensland, T. (2020, October 20). Cooling-off period for residential property contracts (for buyers only). Retrieved December 07, 2020, from https://www.qld.gov.au/law/laws-regulated-industries-and-accountability/queensland-laws-and-regulations/regulated-industries-and-licensing/regulated-industries-licensing-and-legislation/property-industry-regulation/legal-requirements-for-the-property-industry/cooling-off-period-for-residential-property-contracts
Schneider, R. (2015, January 02). Understanding cooling-off periods. Retrieved December 07, 2020, from https://www.domain.com.au/advice/understanding-cooling-off-periods-4525/
Victoria, C. (2012, August). Real estate: A guide for buyers and sellers [PDF]. Melbourne: Victorian Consumer &; Business Centre.