Cooling-Off Periods by State: What Buyers and Sellers Need to Know

Introduction

Cooling-off periods play a crucial role in Australian property transactions. They give buyers a limited window to reconsider a purchase after signing a contract and offer a safeguard against rushed decisions. However, cooling-off rules are not consistent across Australia. Each state and territory sets its own timeframe, conditions, and exceptions.

For sellers, understanding cooling-off periods is just as important. A buyer exercising cooling-off rights can disrupt settlement timelines, impact negotiations, or even collapse a sale. In Queensland, cooling-off rights now interact closely with the new mandatory seller disclosure regime, making compliance more critical than ever.

This guide explains what a cooling-off period is, how it works in each state, and what buyers and sellers need to know in 2026.

What Is a Cooling-Off Period?

A cooling-off period is a short timeframe after a property contract is signed during which the buyer can cancel the contract without needing to provide a reason. It is designed to protect buyers from pressure or impulsive decisions.

If a buyer terminates during the cooling-off period, they may be required to pay a small penalty, depending on the state. Outside this period, termination rights are far more limited and usually involve breach or failure to meet conditions.

Cooling-Off Periods: State-by-State Breakdown

Queensland

Cooling-off period: 5 business days
Penalty for termination: 0.25% of the purchase price

Queensland buyers can terminate within five business days of signing the contract. Importantly, cooling-off rights operate separately from seller disclosure termination rights under the Property Law Act 2023. If disclosure is defective, buyers may terminate even after the cooling-off period ends.

New South Wales

Cooling-off period: 5 business days
Penalty for termination: 0.25% of the purchase price

NSW cooling-off rules are similar to Queensland’s, but disclosure requirements differ. Cooling-off can be waived with a solicitor’s certificate.

Victoria

Cooling-off period: 3 business days
Penalty for termination: 0.2% of the purchase price

Victoria’s cooling-off period is shorter and does not apply to auctions or properties purchased within three business days before or after an auction.

South Australia

Cooling-off period: 2 business days
Penalty for termination: varies

Cooling-off rights are limited and do not apply in many sale scenarios, including auctions.

Western Australia and Tasmania

Cooling-off period: No statutory cooling-off period

Buyers rely heavily on contract conditions, such as finance or inspection clauses, rather than statutory cooling-off rights.

Australian Capital Territory

Cooling-off period: 5 business days

The ACT operates under a strong disclosure regime, reducing reliance on cooling-off protections.

Importance of Cooling-Off Periods

For buyers, cooling-off periods provide:

• Time to obtain legal advice

• Opportunity to organise finance

• Space to reflect on the decision

For sellers, cooling-off periods introduce uncertainty. A property may be removed from the market only for the buyer to withdraw days later. This makes accurate disclosure and preparation essential to minimise buyer hesitation.

What Buyers Can Do During Cooling-Off

During the cooling-off period, buyers typically:

• Review the contract with a solicitor or conveyancer

• Conduct building and pest inspections

• Finalise finance approval

• Review disclosure documents and searches

In Queensland, buyers often use this period to scrutinise Form 2 disclosure packs. Platforms like SearchX allow buyers to review title searches, plans, body corporate records, and compliance documents efficiently, reducing uncertainty and the likelihood of termination.

What Sellers Need to Know

Sellers should understand that cooling-off periods are not a sign of buyer hesitation alone. They are a statutory right.

To reduce termination risk, sellers should:

• Ensure disclosure documents are accurate and complete

• Avoid late or missing information

• Be transparent about property risks

In Queensland, defective disclosure gives buyers termination rights beyond the cooling-off period, making early compliance even more important.

How to Waive, Shorten, or Extend Cooling-Off

In some states, buyers can waive cooling-off periods by providing a solicitor’s certificate. Cooling-off periods may also be shortened or extended by agreement between the parties.

Sellers should be cautious about pressuring buyers to waive rights, as this can raise legal and ethical issues and may deter genuine purchasers.

What Happens If You Cancel?

If a buyer cancels during the cooling-off period:

• The contract ends

• The buyer forfeits the applicable penalty

• The seller can re-list the property

If termination occurs outside cooling-off due to disclosure defects or breach, the consequences can be more complex and costly.

Common Exceptions

Cooling-off periods often do not apply to:

• Auction sales

• Properties purchased immediately before or after auction

• Some commercial or industrial properties

Each contract should be reviewed individually.

Tips for Buyers and Sellers

For buyers:

• Understand your state’s cooling-off rules

• Review disclosure documents early

• Seek legal advice promptly

For sellers:

• Prepare disclosure documents before listing

• Use tools like SearchX to manage compliance

• Reduce surprises that lead to termination

Conclusion

Cooling-off periods vary significantly across Australia, but their purpose remains the same: protecting buyers while balancing seller certainty. In 2026, understanding how these periods operate alongside disclosure obligations is essential for both parties.

In Queensland, where disclosure compliance directly affects termination rights, preparation is key. By ensuring accurate disclosure and leveraging platforms like SearchX, sellers can reduce cooling-off risk, protect their sale, and move toward settlement with confidence.