A cooling off period is the time during which a buyer of residential property in NSW can change their mind and withdraw from the purchase contract without facing major financial penalties.
It allows buyers to complete key due diligence—like building and pest inspections, securing finance, or simply taking time to reconsider their decision outside the pressure of negotiations.
Key Points About the Cooling Off Period in NSW
How Long Is the Cooling Off Period?
In most NSW residential property transactions, the standard cooling off period is:
- 5 business days, starting the day after contracts are exchanged
- It ends at 5pm on the fifth business day
However, there are important exceptions:
- Auction sales: Properties sold at auction do not have a cooling off period
- Same-day post-auction exchange: If you exchange contracts on the same day as an auction (after the property is passed in), there is also no cooling off period
- Off-the-plan purchases: A 10-business day cooling off period applies, due to the complexity of these contracts
Can You Waive the Cooling Off Period?
Yes, in NSW, buyers can waive, shorten, or extend the cooling off period—but only under certain conditions:
- To waive your right to the cooling off period, your solicitor or conveyancer must provide the seller with a signed 66W certificate
- To shorten or extend the period, both parties must agree in writing
Important: Waiving the cooling off period can make your offer more attractive in a competitive market—but it removes your legal right to walk away. Always seek legal advice before agreeing to do so.
What Happens If You Withdraw During the Cooling Off Period?
If you decide to back out of the purchase during the cooling off period:
- You must give the seller a written notice of rescission
- You will forfeit 0.25% of the purchase price as a termination fee
- For example, if the property costs $1,000,000, you would forfeit $2,500
This fee is the only financial penalty, and the remainder of your deposit will be refunded.
Are There Any Exemptions?
You don’t have a cooling off period if:
- You buy at auction
- You exchange contracts on the same day as an auction after the property is passed in
- You waive your rights via a 66W certificate
In these cases, your decision is immediately binding, so it’s critical to complete all necessary checks before exchanging contracts.
Final Advice for Buyers
The cooling off period is a valuable safety net—but only if you use it wisely. During this time, make sure to:
- Finalise your loan approval
- Complete building and pest inspections
- Have your solicitor or conveyancer review the contract thoroughly
If anything feels uncertain, speak to your legal representative before the period ends. Being thorough now can save you stress—and money—down the track.nds. Being fully informed now could save you significant stress and money later.
