Using your cooling-off period — how to pull out of a contract in NSW and Victoria

The short version

The cooling-off period lets you change your mind after signing a private-treaty contract, but it doesn't cancel itself. To pull out you have to actively rescind — put it in writing and get that notice to the seller (or their agent or solicitor) before the period ends. Do nothing and the contract simply firms up. In NSW you have 5 business days, ending at 5pm on the last day; in Victoria you have 3 clear business days. Using the window costs you a set forfeit, but it returns the rest of your deposit and releases you from the purchase.

Rescinding is something you do, not something that happens

This is the part buyers most often get wrong. The cooling-off period is a right toget out, not a trial period that lapses in your favour. If you sign and then go quiet, the contract becomes binding once the days run out. To step away you must give a notice of rescission — a short written statement that you're rescinding the contract under the cooling-off provisions. It doesn't need to explain why; the right is yours to exercise without giving reasons.

Because the deadline is fixed and unforgiving, treat the notice as urgent from the moment you have doubts. If your finance, building report or a contract review is what you're waiting on, chase it early — a decision you can't make until 5pm on the last day is a decision made too late.

NSW — the 5 business day window

Under the cooling-off provisions of the Conveyancing Act 1919 (NSW), the period runs from the day contracts are exchanged and ends at 5pm on the fifth business day. To rescind, you serve a written notice on the vendor or the vendor's solicitor or agent before that deadline. When you do, the vendor keeps a forfeit of 0.25% of the purchase price and the balance of your deposit is returned. In practice your conveyancer usually prepares and delivers the notice, so tell them the moment you decide — not on the last afternoon.

Victoria — 3 clear business days

In Victoria, section 31 of the Sale of Land Act 1962 (Vic) gives most private-sale buyers 3 clear business days after signing. "Clear" means the day you sign and the day you give notice don't count, so the window is a little longer than it first sounds. You end the contract by giving the vendor or their agent written notice that you're using your cooling-off rights. The penalty is $100 or 0.2% of the purchase price, whichever is greater, and the rest of your deposit comes back.

Getting the notice to the right place, in time

A rescission only works if it actually reaches the other side before the deadline, so how you deliver it matters as much as what it says. Send it in a way that leaves proof — email with a record, or delivery to the vendor's or agent's address — and keep a copy. If you're relying on your conveyancer, confirm they've sent it and that the other side has it. A notice sitting in your drafts at 5:01pm is a notice you never gave.

What using it doesn't change

Cooling off ends this contract; it doesn't rewrite the rules around it. It won't help where there was never a cooling-off period in the first place — an auction, or a sale where you signed a Section 66W certificate in NSW, carries none to use. It doesn't recover the forfeit. And it doesn't extend itself: if you need longer, that's a separate request the vendor has to agree to, covered in our guide on extending the cooling-off period.

What to check before you sign

1. Confirm you actually have a cooling-off period. An unconditional or auction contract gives you nothing to rescind under, so check before you assume there's a way back.
2. Write down the exact deadline. Note the date and, in NSW, the 5pm cut-off. Count business days, not calendar days, and remember public holidays don't count.
3. Line up your finance and reports to land inside the window. The period is only useful if the checks you're relying on finish before it closes.
4. Know who to serve and how. Get the vendor's solicitor or agent's details at signing, and agree with your conveyancer who sends the notice if you decide to pull out.
5. Decide early, deliver with proof. Don't leave a rescission to the last hour, and keep a dated record that it was sent and received.

Common questions

Do I have to give a reason to pull out during cooling off?

No. In both NSW and Victoria the cooling-off right is yours to exercise without explaining why. The notice needs to make clear you're rescinding under the cooling-off provisions — it doesn't need to justify the decision.

Can I just tell the agent over the phone that I'm pulling out?

Don't rely on it. A rescission needs to be in writing and delivered before the deadline, with something to prove it arrived. A verbal change of mind isn't a rescission, and a conversation with no record is easy to dispute later.

Will I get my whole deposit back?

You get the balance back, less the set forfeit — 0.25% of the price in NSW, or $100 or 0.2% (whichever is greater) in Victoria. If you paid the full 10%, the difference between that and the forfeit is returned. Our cooling-off forfeit guide works through the numbers.

What if the period runs out before my finance is confirmed?

Then you're forced to choose blind, which is exactly the trap to avoid. You can ask the vendor to extend the period in writing before it closes, but only they can grant it. If they won't, and you can't confirm finance, rescinding within the window is safer than being locked into a contract you can't fund.