The cooling off period is the name given to a period of time after the signing of a contract of sale that enables you to “get out” of the contract.
When it comes to property, if you decide to cancel the purchase within this set timeframe, you may still be legally required to pay a small termination fee to the seller.
The cooling off period is the perfect opportunity to consolidate your buying decision. This is when you might choose to enlist the services of a building and pest inspector and make sure that you’ve secured the adequate pre-purchase loan approval.
While a cooling off period often applies to the sale of property but this is not always the case. For example, there is no cooling off period for properties purchased at an auction.
You may also choose to waive your right to a cooling off period.
It’s important to understand that cooling off periods differ greatly from state to state, so buyers should do their own research into which rules apply to them.
In New South Wales, Queensland and the Australian Capital Territory, the buyer has five business days to back out of the contract of sale. However, if the buyer does decide to back out of the contract, they must pay a termination fee of 0.25% of the purchase price.
Whereas in Victoria, the cooling off period is three business days and the termination fee is 0.2%.
In Northern Territory, the rule is four working days and there is no termination fee.
And in South Australia, this period is only two-working days and a flat fee of $100.
Generally, Tasmania does not acknowledge cooling off periods when it comes to the purchase of property.« Back to Glossary Index