What Is the Cooling-Off Period? Your Safety Net When Buying Property in Australia

Posted on December 11, 2025 | By John Paul

You’ve just signed a contract on your dream home (or investment property). Adrenaline is pumping, the agent is smiling, and then… reality creeps in. Did I pay too much? Is that crack in the wall actually a big problem? Can I really afford this?

Good news: in Victoria and Queensland (and most other states), the law gives you a short cooling-off period – a built-in “get out of jail (almost) free” card after signing a contract to buy a residential property.

Here’s exactly what it is, how long you get, and the exceptions that can catch people out.

What Is the Cooling-Off Period?

It’s a short window after you sign the contract during which you can legally walk away from the purchase for any reason (or no reason at all) and get most of your deposit back.

Victoria: 3 clear business days

Queensland: 5 business days (for houses & vacant land) (Note: Units and off-the-plan contracts in QLD often have different rules)

The clock starts the day after you receive a fully signed copy of the contract.

What Happens If You Cool Off?

You give written notice (email or letter is fine) before the deadline.

The seller must refund your deposit minus a penalty: – Victoria: 0.2 % of the purchase price (e.g. $1,300 on a $650,000 property) – Queensland: 0.25 % (e.g. $1,625 on a $650,000 property)

That small penalty is the price of your peace of mind.

When There Is NO Cooling-Off Period (Big Exceptions!)

This is where most buyers get burnt. Cooling-off does not apply if:

You buy at auction (or on the same day as the auction) → Auction contracts are final the moment the hammer falls.

You buy before the auction and sign a contract with the 66W (VIC) or similar waiver.

The property is commercial or rural (over a certain size).

You’ve already bought another property from the same seller in the last 28 days (rare “recent purchaser” rule).

In Queensland, off-the-plan unit contracts usually have no cooling-off (but come with other protections).

Pro Tips to Protect Yourself

Never sign anything at an open home without your conveyancer reviewing it first.

If you love a property but want the safety net, make your offer subject to auction or negotiate a longer settlement instead of waiving cooling-off.

As soon as you sign, send the contract immediately to your conveyancer (e.g. First Class Legal) so they can start building reports and searches during the cooling-off window. If something nasty turns up (illegal structures, major defects, flood overlay), you still have time to exit.

Real-Life Example

You sign a contract on a Tuesday night for a house in Melbourne at 7 pm. You receive the signed copy Wednesday morning → cooling-off ends 5 pm Saturday (3 clear business days: Thu, Fri, Sat). Send your termination notice by 4:59 pm Saturday and you walk away losing only ~$1,000–$1,500 instead of your full 10 % deposit.

The Bottom Line

The cooling-off period is one of the best consumer protections in Australian property law — but only if you know it exists and when it doesn’t apply. Treat every contract as final unless you’re 100 % sure, because auctions and waivers remove this safety net completely.

Have you ever used cooling-off to escape a bad buy? Or lost sleep because you signed at auction? Drop your story below — we’ve all been there!

This is general information. Cooling-off rules differ slightly between states and change over time. Always confirm with your licensed conveyancer or solicitor. First Class Legal – helping buyers across Victoria and Queensland stay protected every day.