You've found the property, signed the contract, and then had second thoughts. In Victoria, you may have a legal right to change your mind — but the rules are specific, and the exceptions matter.
This guide explains exactly how the cooling-off period works, when it applies, and when it doesn't.
What is the cooling-off period?
Under Section 31 of the Sale of Land Act 1962 (Vic), a buyer who purchases residential property via private sale has a 3 clear business daycooling-off period after signing the contract. During this time, you can withdraw from the contract for any reason — no questions asked.
The cooling-off period exists to protect buyers from making hasty decisions under pressure. It gives you a short window to reconsider the purchase, finalise inspections, and confirm your finance.
When does it start and end?
The cooling-off period begins at the end of the day you sign the contract. It runs for 3 clear business days — weekends and Victorian public holidays are excluded.
For example, if you sign on a Wednesday, the cooling-off period runs Thursday, Friday, and Monday (assuming no public holidays). You can cool off any time up to 5pm on Monday. If you sign on a Friday, the period runs Monday, Tuesday, and Wednesday.
The 0.2% penalty
Cooling off is not free. If you withdraw during the cooling-off period, the vendor is entitled to keep 0.2% of the purchase priceas compensation. On a $700,000 property, that's $1,400.
While this is significant, it's a fraction of the cost you could face if you proceed with a problematic purchase. Think of it as an insurance premium for the right to change your mind.
When the cooling-off period does NOT apply
There are important exceptions where you get no cooling-off period:
- Auction purchases— if you buy at auction, or within 3 business days before a scheduled auction, there is no cooling-off period. For full details, see our guide on buying at auction in Victoria.
- Previously cooled off— if you've already exercised a cooling-off right on the same property and re-signed, you don't get another one.
- Section 31 waiver— you can waive the cooling-off period by obtaining a solicitor's certificate (known as a Section 31 certificate). This is sometimes requested by vendors who want certainty.
- Commercial property— the cooling-off provisions only apply to residential property (land with no more than 20 hectares with a home on it, or land zoned residential).
Section 31: the vendor can shorten it
The vendor has the right to serve a Section 31 notice, requiring you to either confirm or withdraw within a shortened timeframe. If you don't respond, the cooling-off period can end automatically.
This is a pressure tactic sometimes used by vendors who suspect the buyer is using the cooling-off period to negotiate with other properties. If you receive a Section 31 notice, speak to your solicitor immediately. Our guide on questions to ask your solicitor covers what to discuss about cooling-off situations.
How to use the cooling-off period wisely
Three business days is not much time. To make the most of it:
- Get inspections done before signing— don't rely on the cooling-off period for building and pest inspections. Book them as early as possible, ideally before you even sign the contract.
- Confirm your finance— if your pre-approval has conditions, make sure you're confident the lender will grant formal approval within the timeframe.
- Review the Section 32 before signing— use Pre Contract Review for an instant analysis so you know what issues to raise during the cooling-off period, rather than discovering them after it's expired.
- Engage your solicitor early— don't wait until you've signed to brief your solicitor. Give them the documents as soon as you're serious about the property.
Cooling off vs. rescission under Section 27
The cooling-off period and rescission are different legal mechanisms. Cooling off is your right to withdraw for any reason within the statutory timeframe, subject to the 0.2% penalty.
Rescission under Section 27 of the Sale of Land Act allows you to cancel the contract if the Section 32 Vendor's Statement was materially deficient — for example, missing required information or containing false statements. Rescission carries no penalty (you get your full deposit back), but it's harder to prove and often requires legal proceedings.
Understanding the difference is important because many buyers confuse the two. Cooling off is a safety net for buyer's remorse. Rescission is a remedy for vendor non-disclosure. They protect against different risks.
Key takeaways
The cooling-off period is a valuable safety net, but it's not a substitute for proper due diligence. Do as much preparation as possible beforeyou sign, and use the cooling-off period only as a final backstop — not as your primary review window.
For more on preparing for a property purchase, see our first home buyer's guide or learn about the red flags to watch for in vendor's statements.