What Is a Cooling-Off Period When Buying Property in NSW?
Published October 2026
Signing a contract for what’s probably the biggest purchase of your life is a big step, and NSW law gives most residential buyers a short window afterwards to change their mind. That window is the cooling-off period. It’s a useful protection, but it’s shorter than many people expect, it isn’t free to use, and in some situations it doesn’t apply at all. This post explains how it works, when you don’t get one, and what it means if you’re asked to waive it.
How Long Is the Cooling-Off Period?
When you buy residential property in NSW by private treaty, you generally have a five business day cooling-off period. It starts when contracts are exchanged and ends at 5pm on the fifth business day after the day of exchange.
If you’re buying off the plan, the cooling-off period is longer: ten business days.
The cooling-off period is for the buyer only. Sellers don’t get one: once contracts are exchanged, the seller is committed.
What Does It Cost to Pull Out?
If you rescind (cancel) the contract during the cooling-off period, you forfeit 0.25% of the purchase price to the seller, which is $250 for every $100,000. On a $1,200,000 purchase, that’s $3,000.
Strictly speaking, the full deposit is payable when contracts are exchanged. That’s usually 10% of the price, though 5% is often agreed. If you then rescind during the cooling-off period, the 0.25% is kept by the seller and the balance of your deposit is refunded to you. In some cases, the contract allows (or can be amended to allow) you to pay just the 0.25% on exchange, with the rest of the deposit due before the end of the cooling-off period. We can check what your contract says, and let you know whether it’s worth asking the seller for this, before you exchange contracts.
To rescind, you need to give the seller written notice before the cooling-off period ends, and the timing and method of giving the notice matter. If you’re thinking about cancelling, call us straight away rather than waiting until the last day.
When There’s No Cooling-Off Period
There is no cooling-off period if:
you buy the property at auction
the property was passed in at auction and you buy it later that same day
you’ve waived it with a section 66W certificate (see below).
Contracts made by exercising an option to purchase also have no cooling-off period.
This is why buyers at auction need to have finance, inspections and the contract reviewed and any amendments agreed before auction day.
Shortening, Extending or Waiving It
The cooling-off period can be shortened or extended if both buyer and seller agree in writing.
It can also be waived entirely. To do this, the buyer’s own licensed conveyancer or solicitor signs a section 66W certificate, confirming they’ve explained the contract to the purchaser and the effect of giving up the cooling-off period.
Agents sometimes ask buyers to waive cooling-off, particularly when an offer is accepted before an auction, or when there are several interested buyers. Waiving it can make your offer more attractive to the seller, but it means you’re bound the moment contracts are exchanged, just as you would be at auction. Before you agree, make sure:
your finance is approved
your building and pest inspections, and any strata report, are done
we’ve reviewed the contract and you’re comfortable with all of it.
What Changed in 2026?
Every NSW residential contract must include a cooling-off notice setting out the buyer’s rights. The Conveyancing and Real Property Amendment Act 2025 updated the wording of that notice, and since 1 June 2026, contracts must use the new notice. The core rules have not changed: five business days (ten for off the plan purchases), with 0.25% of the purchase price as a cost to rescind (cancel).
Use the Time Well
The cooling-off period gives you a few days to check anything you couldn’t check before exchange, but it goes quickly. If you’re buying by private treaty, talk to us before you sign the contract. Where possible, we’ll review the contract and help you decide whether to exchange with a cooling-off period, or waive it. Get in touch for a fixed-fee quote.
This post is general information, not legal advice. Status of the law checked as at 28 September 2026.
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