Cooling-off period
A short period after exchanging contracts when a buyer can withdraw from a residential purchase, usually by paying a small penalty.
- NSW: 5 business days for residential property, 10 for off the plan
- NSW penalty to withdraw: 0.25% of the purchase price
- No cooling-off when you buy at auction
How it works
In NSW, the cooling-off period starts when contracts are exchanged. If you withdraw during it, you forfeit 0.25% of the price, or $250 per $100,000. Other states set different periods and rules.
When it does not apply
In NSW there is no cooling-off at auction, or if you exchange on auction day after the property is passed in. Buyers can also waive cooling-off, often in exchange for a better price, but only with legal advice.
On a $700,000 NSW purchase, withdrawing during cooling-off would cost 0.25% of $700,000, which is $1,750.
Illustrative only. Figures are examples, not a forecast or recommendation.
Use cooling-off as a safety net, not a plan. The checks that matter should already be done.
Common questions
Is the cooling-off period the same in every state?
No. Periods, penalties and exemptions differ by state, so check the rules where the property is.
Can I waive the cooling-off period?
Yes, using a certificate signed by your solicitor. It removes your right to withdraw, so only do it once due diligence is complete.
Related terms
Sources
General information only. It does not consider your objectives, financial situation or needs, and is not financial, credit, tax or legal advice. Rules change, so check current law and get advice from a licensed professional before acting.